At the core of SME competitiveness is the knowledge and skills of the workforce. This cluster examines how these are developed across the lifecycle, starting with how education systems foster entrepreneurial skills and align practical training with SME needs. It then considers how SMEs access relevant skills, leveraging skills intelligence, upskilling and reskilling, and empowering women entrepreneurs. It also explores the role of the social economy and support for social enterprise development.
SME Policy Index for Western Balkans and Türkiye 2026 – Economy Profile for Albania
Abstract
Workplaces worldwide are undergoing rapid transformation. Considering the opportunities and challenges of the twin transitions, and against the backdrop of substantial change catalysed by demographic shifts, businesses are reconsidering both their operations and the skills they require. As elsewhere across the globe, small and medium-sized enterprises (SMEs) in Albania are at the forefront of navigating this changing environment. Preparing for the future begins in schools and training institutions, which must move beyond a narrow focus on subject-specific knowledge to cultivate transversal skills such as adaptability, problem-solving and teamwork, all the while placing a stronger emphasis on experiential and practical learning.
Yet, pressures are mounting as labour-market needs evolve faster than current education and training arrangements can adapt, with early warning signs already visible. Foundational learning outcomes are weakening, reflecting a broader global decline observed across many education systems, but with particularly pronounced effects in Albania: the latest Programme for International Student Assessment (PISA) scores showed a 47-point decline in reading (compared to 11 points across the OECD) and a 69‑point drop in mathematics (compared to 16 points across the OECD) (OECD, 2023[1]). At the same time, approximately one in four employers in Albania report that the skills taught in the education system do not meet the needs of their business (RCC, 2023[2]). For Albania’s SMEs to remain resilient and competitive, education and training systems must not only raise the quality of learning provision but also become more agile, equipping students with the resilience to thrive in an ever-changing world of work.
Accordingly, this section considers both how the education system equips learners with entrepreneurial capabilities and how education and training pathways connect more effectively with SMEs to support labour market entry and firm-level skills needs.
5.1.1. Fostering entrepreneurial skills and mindsets through education
Within this broader transformation, nurturing entrepreneurial skills and mindsets among students is essential. Global trends indicate a growing need for such skills, with a projected 32% increase in demand in Europe alone by 2030 from 2016 (European Commission, 2024[3]). A similar pattern is evident in Albania: according to a recent tracer study, nearly 45% of recent graduates indicated that they wanted to start a business in the next two years – a significant increase from just a few years earlier, in 2016, when only 16% of graduates expressed this desire (Semini, 2024[4]).
The growing interest in entrepreneurship underscores the need for a more strategic and coherent approach to entrepreneurial learning. In Albania, relevant objectives are reflected across a range of national strategies, spanning education, innovation and private sector development (Table 5.1). However, there are two primary shortcomings. First, references to entrepreneurial learning are often concentrated on higher education, despite evidence that early exposure, particularly in primary and secondary education, yields stronger long-term outcomes. Indeed, studies show that cumulative participation in entrepreneurial education results in greater benefits over time (European Commission, 2015[5]). Second, while key strategies acknowledge the importance of entrepreneurial learning, they often lack clarity on the concrete measures to be implemented or targets against which progress will be assessed, complicating monitoring and evaluation efforts.
Albania remains one of the few Western Balkan and Türkiye (WBT) economies that has not introduced entrepreneurship as a key competence through a cross-curricular approach. Instead, entrepreneurial skills and knowledge are taught as separate mandatory subjects from primary through upper secondary education.1 However, this approach is not only misaligned with the European Union’s (EU) Entrepreneurial Competence Framework, which emphasises the importance of embedding entrepreneurship across the entire education system, but also presents several limitations in fostering true competence development. Delivering entrepreneurship in a single subject across all grades reduces opportunities for repeated, reinforced and contextually relevant learning, which cross-curricular integration enables. It also risks reinforcing the perception that entrepreneurship is a stand-alone topic (e.g. more closely tied to business or economics, such as through the Grade 12 economics course), rather than a transversal competence applicable across disciplines like mathematics, geography, science or languages.
In the absence of cross-curricular integration, practical experiences offer a key means to build core skills and apply knowledge in real-world contexts. Indeed, research shows that entrepreneurial learning is most effective when a hands-on, experience-based approach is applied (Gangi and Sirelkatim, 2023[10]). In Albania, however, such opportunities remain unevenly distributed, largely concentrated in secondary education. Junior Achievement Albania is a key provider of practical entrepreneurial learning through business simulations, mentoring and project-based learning activities. Although participation in its programmes is elective, and therefore depends on the initiative of schools and students, it has achieved nationwide coverage across the pre-university education system.2 One of its flagship offerings is the “Student Company” module, which equips students with skills such as financial management, product development, teamwork and decision making by guiding them through the process of turning ideas into functioning businesses. In the 2024/2025 school year, the module was implemented in 41 upper secondary schools, reaching more than 1 900 students (Junior Achievement of Albania, 2025[11]).
Effective entrepreneurship education also relies on strong pedagogical support, yet this remains insufficient in Albania, particularly in general education. Pre-service teacher training largely overlooks entrepreneurship, with no dedicated courses in higher education to prepare future teachers in this area. There are also no in-service opportunities offered at the system level. As entrepreneurship is not recognised as a cross-curricular key competence, training is typically reserved for teachers of specific subjects (e.g. citizenship or economics). This targeted approach contrasts with teacher interest: 66% of surveyed teachers reported being very interested in developing their entrepreneurial competence, yet over half had not participated in any related training or had planned to but had not yet done so (Miço and Cungu, 2023[12]). Although recent initiatives such as VETpreneur and EmpowerVET aim to strengthen teachers’ familiarity with the entrepreneurship key competence through more comprehensive capacity-building approaches, their impact remains constrained – VETpreneur due to its limited scale and EmpowerVET as it is still only in the early stage of implementation, as it was launched in 2025.
In contrast, vocational education and training (VET) teachers benefit from a more structured and institutionalised approach. Since 2022, the National Agency for Vocational Education and Training and Qualifications has offered annual training that includes a dedicated module on entrepreneurial skills, alongside detailed teacher guidance for the mandatory “Fundamentals of Entrepreneurship” course (Box 5.1). These government efforts are complemented by non-government initiatives, such as Junior Achievement of Albania’s EU-funded VETpreneur project, which further strengthens teacher capacity in VET. While these initiatives mark significant progress, their strong focus on VET highlights the absence of a comprehensive, system-wide approach to teacher training. Without extending similar support to general education, entrepreneurship risks remaining siloed rather than embedded across the full spectrum of the education system.
The module “Fundamentals of Entrepreneurship” is mandatory for all vocational education and training students in grades 12 and 13. The National Agency for Vocational Education and Training and Qualifications has thus developed a comprehensive teacher guidebook covering 17 core topics, ranging from foundational entrepreneurial skills and mindsets to group work, communication, negotiation and the technical aspects of running a business, such as the legal environment and labour relations. The guide provides key lesson content alongside practical classroom activities and homework suggestions, helping teachers both instil and assess relevant skills and attitudes. Its structure also supports tracking competence progression, with earlier lessons building logically toward more advanced ones (Table 5.2).
Note: SWOT: strengths, weaknesses, opportunities and threats.
Source: Adapted from NAVETQ (2020[13]).
However, fully harnessing the benefits of entrepreneurial learning requires ensuring that all students, particularly girls, are equally encouraged and empowered to participate. Albania performs strongly in this regard: in 2024, 43.2% of tertiary education graduates in STEM fields were female, significantly exceeding the EU average of 33.5% (Eurostat, 2025[14]). Furthermore, PISA 2022 results reveal that in Albania, girls outperform boys in key domains, scoring 19 points higher in mathematics (versus an OECD average where boys lead by 9 points) and 29 points higher in science (compared to no gender gap across the OECD) (OECD, 2023[15]).
A number of initiatives have been introduced to support girls’ engagement in these fields. Technical schools hold an annual “Girls’ Day” to promote STEM-related opportunities. Moreover, girls pursuing “atypical” vocational pathways – many of which fall within STEM, including mechanical studies and electronics – are eligible for full scholarships. Additional programmes, such as Girls Go Circular by Junior Achievement Albania (launched in April 2024) and the Albanian Girls in ICT Academy by Albanian Skills, aim to boost girls’ participation by offering hands-on experience in areas such as coding, artificial intelligence and robotics. Yet, despite these efforts, the impact of such initiatives is limited by their voluntary nature and the absence of systematically integrating them into the education system, such as dedicated career counselling or coordinated social media awareness campaigns, which restricts both their reach and effectiveness.
5.1.2. Bridging the divide between education and training systems and SMEs
Equipping students with the relevant skills is essential to support a smooth transition from school to work and ensure they meet labour market demands. Although Albania has reduced its youth NEET (not in education, employment or training) rate from 29.8% in 2015 to 20.9% in 2024, a decline nearly twice as large as the WBT average, it continues to face significant challenges (Figure 5.1). The rate remains slightly above the regional average (19.2% in 2024) and is the third-highest in the region. It is also more than two times higher than the EU average (9.1%), highlighting persistent barriers to a successful transition from education to employment.
Percentage of 15-24 year-olds
Note: Gender-disaggregated data for Albania are not available.
Sources: OECD (2025[16]); Eurostat (2024[17]).
The Youth Guarantee scheme has become a key policy lever in Albania to address these persistently high youth NEET rates. The pilot phase of the initiative was implemented from October 2023 through the end of 2025 in three municipalities (Tirana, Vlorë and Shkodër) with support from a network of local partners and international actors, notably the United National Development Programme (UNDP) through its EU4Youth project.3 At its core, the Youth Guarantee pilot utilises a dual-track approach by integrating wage and self-employment pathways (Table 5.3).
Source: information provided by Albania’s government during the assessment period.
The impact of these measures hinges on reaching a largely disengaged NEET population, with only one in four unemployed NEET youth registered with the National Agency for Employment and Skills (NAES), the scheme’s main implementing body (Albanian Ministry of Economy, Culture and Innovation, 2024[18]). To address this, the NAES has invested in bolstering the accessibility and visibility of the Youth Guarantee scheme, including the launch of a dedicated online portal (garanciarinore.puna.gov.al)4 and a targeted social media campaign. These efforts appear to have contributed to encouraging initial uptake. Across the three pilot regions, 3 175 young people applied to the scheme, of whom 2 252 were officially enrolled as participants between November 2023 and December 2025; notably, around 70% registered with labour offices for the first time, suggesting the programme has been successful in reaching previously disengaged youth. Among enrolled participants, 1 732 received an offer of employment, education or training (around 77% of confirmed participants). Follow-up data further indicate that approximately 59% of participants remained in a positive situation six to twelve months after exiting the programme.5
Nonetheless, whether the NAES can handle the added pressure associated with the forthcoming national rollout in 2026 remains uncertain. While the agency has committed to targeted capacity-building efforts, including staff training across employment offices, training centres and vocational schools, progress has been limited. As part of the pilot phase, 30 employees from the regions of Tirana, Shkodra and Vlora were trained to support the implementation of the Youth Guarantee (AKPA, 2024[19]). However, caseloads remain high at 269 jobseekers per counsellor (compared to the International Labour Organization’s recommended ratio of 100:1), and between 2020 and 2024, the number of staff did not increase, staying steady at 298,6 thus raising concerns about the adequacy of current resourcing (World Bank, 2022[20]). These constraints risk limiting the depth and quality of individualised support, underscoring the need for sustained investment in frontline services to ensure effective implementation at scale.
One prong of the Youth Guarantee scheme – and more broadly, a type of training that is gaining traction in Albania – is VET. Reforms in recent years, such as the restructuring of the steering boards of 26 vocational schools at the start of the 2023/2024 school year, have aimed to increase the involvement and contribution of businesses in the system,7 thus boosting the labour market relevance of curricula and training opportunities. This stronger market orientation is reflected in relatively favourable employment outcomes for VET graduates, who tend to record higher employment rates than university graduates.8 Nevertheless, scope for improvement remains: in 2023, only 38% of recent VET graduates were employed in jobs aligned with their field of study, pointing to continued challenges in matching training provision with demand (Government of Albania, 2024[21]).
Momentum has been building recently toward establishing a foundation for dual VET in Albania, marked by the adoption of a legal framework in late 2024.9 Implementation is now underway across six vocational qualifications in ten public vocational schools across six regions, involving 206 students and 120 businesses through vocational training contracts.10 As part of these pilots, students spend around three days a week in company-based placements. This is slightly below international good practice benchmarks, which often envisage up to 75% of learning time in the workplace, but at the higher end of work-based learning intensity observed in the WBT region (Skills For Jobs, 2024[22]).
To incentivise employer participation, Albania has introduced measures such as tax reductions for participating firms and established a National Skills Fund, which requires all businesses to contribute 0.5‑1.0% of payroll (depending on company size), thereby implicitly encouraging engagement in dual VET schemes. This marks an important step, as work-based learning has never been mandatory for VET students, largely due to the limited availability of internships offered by local companies (ETF, 2025[23]).
Yet, substantial efforts are still needed to enhance the attractiveness of VET in Albania. In 2022, only 17.7% of upper secondary students were enrolled in VET programmes – the lowest share in the WBT,11 where the regional average stands at 55.5% (ETF, 2025[23]). This limited uptake in part reflects broader social perceptions of VET as a second-tier educational pathway (Pano, 2021[24]). Nonetheless, this stigma is not shared by those within the system: a 2022 opinion survey found that 90% of VET students viewed vocational education as a strong option for young people, and 91% believed that VET graduates were more likely to find employment than their peers from general education (Skills Development for Employment Programme, 2022[25]).
Labour market outcomes paint a more nuanced picture. The employment rate among recent VET graduates aged 20-34 reached 80% in 2023, in line with the EU average of 81% (ETF, 2024[26]; CEDEFOP, 2023[27]). However, employment alone does not guarantee that skills will be aligned with job demands: over a third of VET graduates still reported a mismatch between their training and current job (Semini, 2024[4]). More broadly, system-level assessments point to deeper issues in the quality and relevance of VET provision. In a 2024 regional benchmarking exercise, Albania scored just 28 out of 100 for the overall performance of its VET system in equipping young people with relevant skills (second-lowest in the WBT region) and registered the sharpest year-on-year decline in performance across the region (Milovanovitch, 2024[28]). Taken together, the data suggest that while Albania’s VET system facilitates relatively strong labour market participation, it continues to face structural challenges in delivering skills that align with evolving labour market needs.
The way forward
Develop a national framework for entrepreneurship education across all education levels. This should be aligned with the EU Entrepreneurial Competence Framework. Given that Albania has not yet introduced entrepreneurship as a key competence through a cross-curricular approach, a national framework would provide a guiding document to move from teaching entrepreneurship as separate mandatory subjects to embedding the key competence approach.
Expand provision of practical entrepreneurial experience to all learners before leaving compulsory education, given that offerings remain unevenly distributed across the economy and are largely concentrated in secondary education. Guidance should be developed to ensure experiences are embedded in the formal curricula and consider different formats (e.g. participation in student co-operatives, student companies, etc.). Norway provides a useful example of how initiatives such as Junior Achievement can be leveraged to deliver practical entrepreneurial experience across all levels of compulsory education (Box 5.2).
Strengthen the National Agency for Employment and Skills’ resources and capacity to drive successful nationwide implementation of the Youth Guarantee scheme, with a particular focus on sustained investment into outreach partnerships and frontline career guidance and counselling services to build capacity and quality nationally. Continued progress in reducing the youth NEET rate will rely on the ability of NAES to provide relevant and timely career guidance and counselling, in close co-operation and co-ordination with the education system, alongside sustained efforts to establish co-ordinated outreach actions to increase uptake.
Efforts to allocate resources and strengthen the NAES’ capacity should be guided by data-driven insights, such as the in-depth youth NEET profiling factsheet developed by the UNDP in 2025 (UNDP, 2025[29]). The factsheet provides detailed information on who NEETs are and the specific barriers they face, ensuring that programme deployment addresses regional differences and the real challenges experienced by the target population, rather than perceived obstacles.
Norway offers an illustrative example of how practical entrepreneurial experience can be integrated across the full span of compulsory education. While entrepreneurship is embedded in the national curricula, the development of hands-on skills is supported through non-formal learning programmes delivered by Junior Achievement – Young Enterprise Norway (JA-YE Norway). These programmes reach both primary and secondary students, ensuring that entrepreneurial exposure is not limited to older pupils but nurtured from an early age.
At the primary level, initiatives include:
Our Families (grades 1-2) introduces children to the roles and contributions of individuals within a family.
Our Local Community (grades 4-5) immerses students in society, allowing them to explore professions, wages, taxes, democracy and the welfare state through interactive exercises and simulations.
Smart (grades 4-7) encourages students to identify needs; develop creative ideas; and implement solutions, promoting problem-solving, collaboration and innovation.
JA-YE Norway’s operations are supported by substantial government funding, receiving NOK 32 million (approximately EUR 2.7 million) in 2022, enabling the programme to expand its reach and maintain high-quality delivery.
This approach provides a clear model for Albania to expand practical entrepreneurial experiences. By supporting initiatives like Junior Achievement and extending exposure to entrepreneurship from primary through secondary education, Albania could ensure that all learners gain hands-on, experiential opportunities that complement the formal curriculum and foster an entrepreneurial mindset from an early age.
Note: Primary education spans from grades 1-7 in Norway.
Source: Ungt Entreprenørskap (n.d.[30]).
Consolidate and scale dual vocational education and training pilots by strengthening employer engagement and education-industry co-operation. Albania could build on the current pilots by progressively expanding dual VET to additional qualifications and regions, while deepening engagement with employers, particularly SMEs. Closer co-operation between VET schools and businesses would help ensure that workplace learning reflects real production environments, including exposure to new technologies and evolving work practices. Gradually increasing the share of learning delivered in the workplace toward international good practice benchmarks would further support skills relevance and reduce reported mismatches among VET graduates.
While ensuring a skilled workforce for SMEs begins with education, it cannot end there. The pace and complexity of changes in the labour market, particularly in the types of skills and occupations in demand, mean that workers are increasingly required to adapt to new roles or undergo major shifts within their existing jobs. Indeed, by 2027, an estimated 60% of workers worldwide will need to undertake some form of training to keep pace with rapid technological advancements (World Economic Forum, 2023[31]). This reality underscores the growing need for continuous upskilling and reskilling throughout individuals’ working lives to remain employable, productive and resilient.
Persistent skills imbalances are becoming increasingly entrenched in the Albanian labour market, with both employees and SMEs reporting significant gaps in the availability and quality of relevant skills. Nearly half of Albanian workers report substantial unmet learning needs (Badescu, 2023[32]), despite 31.4% being overqualified for their current roles.12 This reveals a pronounced disconnect between educational outcomes and labour market requirements. From the employers’ perspective, the primary constraint to growth is not the quality of labour but its availability, with labour shortages identified as the most pressing challenge in 2023 (RCC, 2023[2]), likely reflecting the continued emigration of skilled workers and a resulting contraction of the domestic talent pool. Thus, to support SME competitiveness and growth, Albania’s skill systems must become more responsive and agile.
Therefore, this section focuses on improving the responsiveness and inclusiveness of the SME skills ecosystem through four interrelated dimensions: more effective skills intelligence, stronger adult learning provision, targeted upskilling to manage the impacts of artificial intelligence and dedicated measures to support women entrepreneurs.
5.2.1. Understanding and anticipating skills needs
Meeting the evolving demands of the labour market requires more than reacting to change as it happens: it depends on a forward-looking understanding of where skills gaps exist today and how needs are likely to shift over time. Skills intelligence is central to this effort, offering the insight needed to align education and training with real-world demand.13 It guides hiring decisions, shapes the content of adult learning and reskilling programmes, and helps ensure that both individuals and enterprises are prepared to navigate ongoing technological and structural transformation.
Against this backdrop, Albania has made notable progress in building a robust skills intelligence system, emerging as one of the most advanced in the WBT region. The importance of skills intelligence is firmly embedded within relevant policy frameworks (Table 5.4). There is a well-balanced emphasis on both assessing current skills gaps and trends (skills assessment) and anticipating future needs (skills anticipation). However, a key shortcoming remains: while the Education Strategy 2021-2026 recognises the skills mismatch in the labour market and includes a specific objective to strengthen the connection between higher education and employer demands, the approach remains largely reactive, with skills intelligence not yet systematically informing regular curriculum updates. The risk is that the education system may not be able to meet rapidly evolving labour market requirements.
Sources: Albanian Ministry of Finance and Economy (2021[8]; 2022[33]); Government of Albania (2024[34]).
Building on this policy foundation, Albania has made tangible progress in recent years in translating its focus on skills intelligence into concrete assessment and anticipation tools (Table 5.5). Most efforts to date have focused on developing short- and medium-term tools, with a particular emphasis on short-term ones. This focus is logical: short-term tools are typically easier to develop, require fewer data inputs, and offer more immediate policy application. By contrast, long-term forecasting (typically defined as five years or more) requires a well-developed statistical infrastructure, substantial data input and iterative validation processes, making it both more complex and resource-intensive (OECD, 2016[35]).
Note: This table only includes state mechanisms, rather than those tools developed and/or carried out by donors (for example, various sector skills studies were conducted with support of donors like the European Training Foundation and the European Bank for Reconstruction and Development).
Sources: ETF (2024[26]); Government of Albania (2024[34]); information provided by the government of Albania during the assessment period.
Despite these challenges, relying primarily on short-term tools limits the ability of education and training systems to respond effectively to evolving labour market demands, as such systems often require several years to adapt. In recognition of this, Albania has begun laying important foundations for a longer-term approach to skills intelligence. The Labour Market Information Observatory serves as a central platform for collecting and analysing labour market data and could play a pivotal role in advancing long-term skills forecasting. It currently consolidates data from the Institute of Statistics (INSTAT) and the NAES, and is expected to be expanded to include inputs from other relevant institutions. These data can be used to track emerging job opportunities and skills needs, offering a valuable starting point for more strategic modelling efforts. With the right inputs, the system could support scenario-based projections and macroeconomic modelling over a ten-year horizon, in line with international good practices (OECD, 2016[35]).
Another strength of Albania’s emerging system is the high level of data disaggregation across gender, region and sector. This enhances the relevance and usability of the tools for more targeted policymaking. Moreover, efforts to integrate digital skills and skills for the green transition into short-term, sector-specific assessments are encouraging. However, these themes have yet to be more systematically mainstreamed across all tools.
That said, the system still faces key challenges, most notably in terms of data availability and institutional coordination. According to stakeholders, the greatest barrier to further developing forecasting tools is the lack of timely and reliable data for national and regional skills needs assessments (IIEP-UNESCO, 2024[36]). In many cases, this gap stems from limited collaboration between relevant institutions, such as between INSTAT and the NAES, which hinders data sharing and integration—although plans to enhance inter-institutional data sharing may address these shortcomings in the coming years.14 A further concern is the fragmentation and potential duplication of tools. Although different tools exist across time horizons, there is currently no systematic process for synthesising their findings, identifying trends or resolving discrepancies between the different tools. As a result, the tools do not yet "speak" to one another, nor are their insights fully integrated into the broader policy cycle.
Demographic trends further underscore the urgency of strengthening Albania’s skills intelligence system, particularly with regard to understanding future labour supply. According to the 2023 census, Albania’s population has declined significantly, dropping by nearly 14% since 2011 to 2.4 million – a decrease of approximately 430 000 residents (Tirana Times, 2024[37]). This decline is driven by persistently low birth rates and high levels of emigration. In 2024, the number of Albanians living abroad was estimated at over 1.2 million, marking an increase of more than 230 000 since 2015 (UN Population Division, 2024[38]). The emigration rate stood at 31.1%,15 the second highest in the WBT region. These figures are underpinned by strong outward mobility intentions: a 2023 survey found that nearly two-thirds of the working-age population would consider emigrating if given the opportunity, with 13% indicating they were likely to leave in the coming years to seek better prospects abroad (Balla, 2023[39]). Emigration is increasingly concentrated among highly skilled individuals, prompting 95% of businesses surveyed in 2023 to call for more decisive government action to retain talent and address critical labour market gaps (ETF, 2022[40]; RCC, 2023[2]).
Moreover, the demographic structure of the remaining population is shifting markedly. Albania is ageing rapidly: between 2011 and 2024, the median age increased from 35.5 years to 44.3 years, and one in five residents is now aged 65 or older (INSTAT, 2025[41]). While the share of the population aged 65+ grew by more than 21 000 between 2024 and 2025 alone, the number of individuals aged 15-29 fell by more than 18 000. Combined with sustained emigration, demographic ageing has led to a sharp contraction of the working-age population (15-64), which has decreased by 18.3% since 2011 (INSTAT, 2026[42]). These dynamics point to a shrinking talent base, making it all the more critical to anticipate and respond to evolving labour market needs with more agile and forward-looking skills policies.
5.2.2. Addressing skills needs of SMEs through adult education
Building on the importance of skills intelligence in identifying current and future labour market needs, it is equally crucial to consider how this information informs the design and delivery of adult education programmes. Ensuring that both employed and unemployed individuals have access to relevant learning opportunities is key to enabling continuous reskilling and upskilling, especially for SMEs, whose employees often perform diverse roles and therefore stand to benefit significantly from targeted training initiatives. Yet, despite this importance, Albania has one of the lowest adult learning participation rate in the WBT region, with only 1.6% of individuals aged 25-64 participating in 2024 – or 12% of the EU average (13.3%) (Figure 5.2). Moreover, this participation rate has stagnated over the past decade, with rates in 2024 only 0.5 percentage points higher than those in 2016, while the EU average has increased by more than three percentage points, underscoring a widening gap that risks undermining the economy’s ability to adapt to ongoing structural changes.
Percentage of population aged 25-64 years
Note: Gender-disaggregated data are not available for Albania.
Sources: Eurostat (2024[43]); OECD (2025[16]); INSTAT (2025[44]).
The limited participation in training occurs against a backdrop of mounting labour market pressures that reinforce the urgency of expanding access to relevant upskilling and reskilling opportunities for SMEs. In 2023, there were more than 61 000 job vacancies, a 54% increase compared to the previous year, with approximately 75% representing newly created positions (AKPA, 2024[45]). However, this surge in demand has not been accompanied by a corresponding decline in unemployment. Albania continues to face high unemployment (9.4% in 2024) and a particularly elevated long-term unemployment rate (6.6%, compared to 1.9% in the European Union).16 The majority of vacancies were concentrated in manufacturing (33.8%), wholesale and retail trade (14.6%), and accommodation and food services (14.2%) (AKPA, 2024[45]). These trends suggest that labour shortages are driven less by a lack of jobseekers and more by a structural mismatch between the skills demanded by employers and those available in the labour force.17 Without targeted and responsive adult learning initiatives, particularly in sectors generating the most new jobs, this gap is likely to persist or widen, hindering both economic growth and employment outcomes.
Addressing this mismatch will require not only greater participation in adult learning, but also more flexible and accessible forms of training that can respond quickly to evolving skills needs. In this context, micro‑credentials are increasingly recognised as effective tools for addressing skills mismatches and broadening access to learning, particularly for underrepresented or disadvantaged groups (OECD, 2023[46]). Their short duration and flexible delivery make them especially well-suited for low-skilled workers, a group that represents a significant share of Albania’s labour force (ILO, 2022[47]). Despite their potential, however, microcredentials are neither legally defined nor formally recognised in Albania’s education and training system. Under current regulations, only qualifications exceeding 125 hours can be included in the Albanian Qualifications Framework (Albanian Ministry of Justice, 2019[48]). This threshold limits flexibility and contrasts with the European approach, which distinguishes between “skills credentials” (1-25 hours) and “learning units” (25-150 hours), enabling more modular and tailored upskilling opportunities (European Commission, 2021[49]; ETF, 2023[50]).
Progress has been made in expanding training opportunities related to digital skills, reflecting a growing recognition of their importance for building a resilient and adaptable labour force. Foundational initiatives, such as the Digital Skills training programme,18 are particularly important given that only 23% of adults possess at least basic digital skills – the lowest of the WBT economies and less than half the EU average (56%) (see Cluster 3) (Eurostat, 2023[51]). However, the uptake of more advanced training remains concentrated among younger and urban populations: for example, 81% of participants in the NAES’ coding programme are aged 15-29, and 58% are based in Tirana, which accounts for less than a quarter of the population (AKPA, 2024[45]). As a result, some populations, especially older adults and those living in rural areas, remain largely excluded from the benefits of digital transformation.
Digital upskilling has become a cross-cutting requirement, from tourism and forestry to ICT, yet its impact and uptake vary significantly by sector. Agriculture provides a particularly illustrative example of both the opportunities digitalisation can unlock and the constraints that arise when skills development does not keep pace.19 Indeed, the sector constituted 15.5% of Albania’s gross domestic product (GDP) in 2024, making it central to the economy, yet it is dominated by an older workforce, with the average farmer around 45 years old (World Bank, 2025[52]; Zhllima et al., 2021[53]). Weak digital skills in this group constrain access to markets and information that could enhance business performance and sustainability, such as through platforms like the “Farmer’s Portal”.20 They also limit the ability to adopt more advanced technologies, including precision farming and satellite-based analytics, which have been shown in small-scale case studies to improve crop yields and quality.21 Consistent with this, stakeholders report a growing demand across the agri-food value chain for a broad range of ICT-related skills, from basic digital literacy and data use to more specialised capabilities linked to smart agriculture solutions (ETF, 2022[54]). In response, targeted initiatives such as the Digital Agriculture and Rural Transformation programme22 and Digital Valley Albania23 have begun to equip individuals and agri-food SMEs with relevant digital skills, although their reach remains limited relative to the size and needs of the sector. Unlocking the sector’s full potential, therefore, depends on equipping farmers with basic (and eventually more advanced) digital competencies.
By comparison, training programmes to develop skills for the green transition among SMEs remain more limited in scope, though their relevance is rapidly growing. Albania stands out in the region for its high share of installed renewable energy capacities (96.4% in Albania versus 52.0% across the region). 24 While this contributes to Albania having the lowest share of workers at risk of displacement among the WBT economies25 (11%) (Rossi, Record and Sidarenka, 2025[55]), there remains a dual need to equip the workforce with the skills required to address the existing gaps in the energy landscape and to diversify into emerging sectors such as solar and wind power (for more information, see Cluster 2). Demand is expected to grow across a range of occupations, including highly skilled roles such as energy and mechanical engineers and medium- to lower-skilled positions26 like wind turbine technicians and solar plant operators (ETF, 2022[40]). The government has begun responding to these needs through the introduction of dedicated courses in public VET institutions27 as well as through several donor-led projects.28
At the same time, the green transition has cross-sector relevance, particularly for SMEs in sectors like tourism and agriculture, which offer significant potential for further greening. Initiatives supported by both the government and international donors (namely through the RisiAlbania project) have contributed to expanding access to training in these areas, through initiatives ranging from general awareness-raising to targeted programmes focused on developing green tourism skills and competences (Box 5.3). Still, findings from the recent Skills Needs Analyses point to significant unmet demand, suggesting that current public training offers must be further scaled and diversified.
RisiAlbania is a project initiated by the Swiss Agency for Development and Cooperation, in partnership with the Albanian Ministry of Economy, Culture and Innovation, to promote youth employment in Albania. In recent years, the project has placed a growing emphasis on equipping young people with the skills needed for the green transition. Running from October 2023 through the end of 2024, RisiAlbania partnered with several established training providers to design and deliver market-relevant courses focused on green competences:
Innovation Management Academy Albania assessed the green skills training needs of both youth and businesses and developed six new dedicated modules on topics such as green entrepreneurship, green marketing and green innovation. To enhance relevance, the academy carried out an assessment of training needs among young people and businesses, alongside an awareness-raising campaign aimed at improving the understanding of skills and the broader green transition.
Albacademy, a vocational school specialising in hotel management and tourism, integrated six new green skills modules into its existing programmes. The updated curriculum seeks to prepare over 100 young people with skills relevant to the Albanian tourism sector, including waste management, energy efficiency and eco-friendly hospitality practices.
The European University of Tirana designed a short-term course focused on sustainable tourism, with a particular emphasis on the intersection between green transition and digitalisation. The course sought to equip more than 50 young people with skills such as environmental awareness, digital marketing and the use of e-commerce platforms.
Together, these trainings seek to strengthen green upskilling pathways for young people by equipping them with practical knowledge and skillsets that align with the needs of a transitioning, environmentally sustainable economy.
Sources: RisiAlbania (2023[56]; 2025[57]).
5.2.3. Upskilling to support AI adoption and use
Artificial intelligence (AI) is rapidly transforming skill requirements across industries, with 32% of global professions expected to undergo significant change, making workforce upskilling essential for SMEs to remain competitive (European Commission, 2024[58]).
Training programmes generally fall into two categories: those focused on developing specialised AI knowledge and skills,29 and those aimed at equipping the average worker with the general skills needed to use and interact with AI technologies (e.g. digital literacy, analytical thinking, creativity) (OECD, 2023[59]). There is a diverse offering of trainings available in Albania (Table 5.6), although there is a substantial gap in terms of public versus private provision, with private provision being only very limited. Despite the scarcity of publicly funded training programmes, Albanian SMEs demonstrate relatively high levels of AI adoption: according to a 2025 survey, nearly 25% reported using generative AI, though this share declined to around 11% when considering the integration of AI into business processes through custom AI systems or digital tools with AI functionalities (see Cluster 3) (OECD, forthcoming[60]). As adoption rates continue to rise, the gap between AI use and workforce training offerings is likely to constrain SMEs’ ability to apply these technologies productively and responsibly.
Sources: AI Hub (n.d.[61]); Albanian ICT Academy (2026[62]); AI Albania (2025[63]); additional information provided by the Albanian government during the assessment period.
However, despite the relatively broad provision, AI trainings in Albania remain insufficiently tailored to the specific needs of SMEs in key economic sectors, limiting their potential to equip workers with the skills needed to deploy, manage and adapt to new technologies. In manufacturing, which accounted for 6% of Albania’s GDP in 2024 (World Bank, 2025[64]), recent evidence suggests that the sector is particularly exposed to automation risks, as many tasks are manual in nature (OECD, 2023[59]). Yet, automation also presents an opportunity: in 2023, the manufacturing and processing sector accounted for the highest share of announced vacancies (33.8%), with occupations such as textile and production line workers in high demand (AKPA, 2024[45]; GroupL Global, 2025[65]). In this context, AI tools, if coupled with targeted training, could help alleviate labour shortages by increasing productivity and reducing reliance on manual labour.
Similar opportunities exist in the healthcare sector, where shortages have been exacerbated by the emigration of skilled professionals, with only 50% of healthcare workers trained in Albania remaining in the economy (Ismaili, Rama and Dragoti, 2024[66]; DW, 2024[67]). While AI cannot replace medical staff, it can support more efficient allocation of resources and streamline administrative processes, such as patient scheduling, billing and health records management (European Commission, 2025[68]).
However, challenges emerge when considering the distribution of digital skills across sectors and the concentration of low- versus high-skilled workers. For SMEs in the healthcare sector, where staff are generally highly skilled, AI-related training is likely to be more feasible, given higher levels of digital literacy. In 2023, 53.2% of individuals with a high level of formal education in Albania possessed at least basic digital skills, although this remains well below the EU average of 79.8% (Eurostat, 2024[69]). In contrast, among low-skilled individuals – often concentrated in repetitive, highly automatable roles such as those in manufacturing – only 8.3% had basic digital skills. This was not only the lowest rate in the WBT region, but also just one-quarter of the EU average (22.6%). Without targeted upskilling efforts, this demographic risks being excluded from the benefits of AI adoption, potentially deepening existing labour market vulnerabilities.
Improving access to AI training is therefore crucial, but comprehensive, systematic initiatives have yet to be established. Some ad hoc efforts exist: for example, the non-profit AI Hub offers free or low-cost coding bootcamps targeting women, minorities and underserved communities (AI Hub, n.d.[61]), while the NAES fully subsidises participation in its coding programme for unemployed jobseekers. However, the reach of these initiatives remains relatively limited. Furthermore, coding represents only a small portion of the skills needed to effectively work with and interact with AI, underscoring the significant potential for increased government involvement.
5.2.4. Improving talent availability by empowering women entrepreneurs
Given the persistence of skills imbalances in Albania, the underutilisation of women’s entrepreneurial potential remains a structural constraint to building a highly skilled, inclusive workforce. Women continue to face lower activity rates, with a labour force participation rate 13 percentage points lower than that of men (69.3% versus 82.3%, respectively, in 2024).30 Furthermore, while women account for 50.4% of the total population, only 31.4% of businesses are owned and run by women in 2024 (INSTAT, 2025[70]).
There is some policy focus on supporting women entrepreneurs, reflected in its horizontal inclusion across several key national strategies (Table 5.7). However, the policy framework is considerably weaker than in previous years, largely due to the lapse of a dedicated action plan on women’s entrepreneurship, which once provided targeted measures and clear objectives. While a standalone strategy may not be essential, the absence of a successor plan has left a gap in focused policy direction.
Note: Where no specific measure is indicated, it is because the relevant strategy does not assign numbers to individual measures.
Sources: Albanian Ministry of Finance and Economy (2021[8]; 2022[33]); Albanian Ministry of Health and Social Protection (2021[71]); additional information provided by the Albanian government during the assessment period.
Building on this limited policy focus, current efforts mainly promote women’s entrepreneurship in broad terms, with little targeted attention to increasing participation in ICT or STEM sectors, despite these fields offering faster growth, higher wages and greater innovation potential. This omission is particularly notable in the Smart Specialisation Strategy 2025-2030, which prioritises areas such as agriculture, tourism, and energy and natural resources, all emphasising greening, sustainability and technological advancement (i.e. domains that rely heavily on ICT/STEM expertise). Although stakeholders consulted during the strategy’s preparation recognised the importance of integrating a gender perspective, the final document only includes one explicit reference to women entrepreneurs. An exception to this gap is the National Strategy for Gender Equality 2021-2030, which highlights the need to support women’s participation in the green economy and digitalisation – both of which are closely linked to ICT and STEM. Nevertheless, women entrepreneurs in Albania remain concentrated in sectors that are less capital-intensive and have lower barriers to entry, such as retail trade and personal services (Figure 5.3) (Shehaj et al., 2023[72]).
Source: Adapted from INSTAT (2025[73]).
A number of targeted support programmes have been developed to support capacity-building among women entrepreneurs. For instance, the Startup Albania Agency holds dedicated information sessions and one-on-one consultations during each call for the national grant scheme, highlighting specific incentives for women applicants. Similarly, the Women's Economic Chamber of Albania delivers workshops, mentorship and networking activities that guide women entrepreneurs in preparing financing applications, developing business plans and identifying suitable funding sources. However, challenges appear to stem less from a lack of available support and more from low levels of participation. In one survey, around 60% of women entrepreneurs reported having never encountered any formal or informal course on how to start a business, whether related to business planning, market analysis, accessing capital or building networks (Shehaj et al., 2023[72]). Notably, two-thirds of these respondents indicated that they would have liked to participate, suggesting the barrier lies in awareness rather than interest. Among these areas, business planning stands out as particularly critical: 25% of women entrepreneurs reported launching their business without a business plan, significantly reducing their ability to access external finance such as loans and grants (Shehaj et al., 2023[72]).
Family obligations and the resulting unpaid care burden continue to limit women’s entrepreneurial activity in Albania, often delaying the start of ventures or discouraging participation altogether. Fewer than 12% of women entrepreneurs are under 30 years old, with the average age being 43, and over a quarter of young women NEETs cite family responsibilities as a reason for not seeking work (UNDP, 2025[74]; Shehaj et al., 2023[72]). While self-employed women are formally entitled to the same maternity leave as salaried employees (365 days), focus groups suggest limited awareness of these rights, particularly in rural areas (Cinque et al., 2022[75]). Childcare access poses additional challenges: urban areas face overcrowding and placement shortages while rural areas see kindergarten closures due to low demand, compounded by inflexible hours that do not align with working parents’ needs (Agolli, Hasmeta and Duci, 2023[76]). Beyond structural issues, persistent stereotypes further constrain women’s participation: 45% of surveyed entrepreneurs reported facing prejudices about lacking ambition or business aptitude (Shehaj et al., 2023[72]).
The way forward
Establish a national skills intelligence governance body bringing together public and private stakeholders representing employment, SMEs, education and innovation to accelerate the improvement of skills intelligence and overcome challenges of data availability and sharing, and integrating diverse tools. This body should leverage advanced technologies, including AI and big data analytics, to support long-term skills forecasting and foresight. Particular emphasis should be placed on the public availability of skills intelligence and on systematically linking skills analysis to education and training provision, including curriculum updates and the development of new training programmes aligned with identified skills gaps.
Establish a legal definition and formal recognition pathway for micro-credentials within the education and training system aligned with European and international best practices. Albania's current regulatory framework creates barriers to flexible, modular learning by restricting formal recognition to qualifications exceeding 125 hours. This threshold prevents the recognition of shorter, targeted learning opportunities that are essential for supporting entrepreneurship, digitalisation, green transition or AI adoption, and for responding rapidly to evolving labour market needs. New Zealand’s experience demonstrates an effective approach to developing a policy framework that balances flexibility with quality assurance in recognising micro-credentials (Box 5.4).
In 2018, the New Zealand Qualifications Authority introduced micro-credentials into the New Zealand Qualifications Framework to recognise skills development opportunities not covered by the regulated tertiary education system and respond rapidly to evolving labour market needs. Micro-credentials are short, credit-bearing qualifications that certify specific skills and knowledge for industry or community purposes. They are evidence-based, designed primarily for upskilling and reskilling, and can be “stacked” to build towards higher qualifications, with each micro-credential comprising up to 40 credits at any level of the New Zealand Qualifications Framework.
All micro-credentials are formally approved and quality assured by the New Zealand Qualifications Authority then recorded on a learner’s Record of Achievement. Providers – including tertiary education institutions, universities, employers and professional bodies – can offer micro-credentials directly or in partnership. Following approval, programmes are published on a searchable public register which details the title, level, credits, provider, approval date and learning outcomes. Achievements can be formally reported and displayed on the learner’s Record of Achievement for a nominal fee.
While uptake in universities remains limited, as micro-credentials are sometimes perceived as less prestigious than traditional qualifications, the system demonstrates a robust regulatory infrastructure, transparency and alignment with labour market needs.
This example can provide a model for establishing clear approval, quality assurance and recording mechanisms, as well as public visibility, which could guide Albania in developing a trusted framework to support lifelong learning, upskilling and labour market responsiveness.
Sources: New Zealand Qualifications Authority (2025[77]); European Commission (2020[78]).
Establish a dedicated cross-sectoral Advisory Group on Women's Entrepreneurship involving public and private stakeholders. This group should provide technical guidance and strategic input on policy measures to advance women’s entrepreneurship, identify support mechanisms for women in ICT, STEM and other high-value sectors, and ensure coherence with broader innovation and competitiveness policies (e.g. the Smart Specialisation Strategy and related strategies). Italy’s Women’s Business Committee provides a relevant example of how such a designated, cross-sectoral advisory body can effectively support women’s entrepreneurship (Box 5.5).
In 2022, the Italian Ministry of Enterprises and Made in Italy established the Women’s Business Committee to serve as the primary policy advisory body for women’s entrepreneurship. Created through inter-ministerial decree, it aims to promote gender equality in business by supporting women’s access to finance, innovation and entrepreneurship skills. Bringing together representatives from government, business associations, academia, and women’s enterprise networks, it supports an inclusive, cross-sectoral approach to policymaking.
The committee provides strategic advice and policy recommendations on how to strengthen women’s participation in entrepreneurship and address systemic barriers, based on three interconnected pillars:
1. Strengthening the tools available to support women who decide to start a business or pursue their own professional venture to accelerate and promote women's participation in the labour market.
2. Focusing on financial support mechanisms and improving information dissemination about available incentives (through the government portal, www.incentivi.gov.it).
3. Acting on welfare policies to support women entrepreneurs, particularly regarding maternity support and family care responsibilities.
Among its early achievements, the committee advised on the design and implementation of the Women’s Enterprise Fund, a national grant and loan scheme that mobilised over EUR 400 million to support women-led start-ups and business expansion. The Committee also recognises that women's empowerment and entrepreneurship development are important levers to support women in combating gender-based violence and considers that the relationship between gender-based violence and women's economic independence and access to the workforce is a key area to work on.
Through its evidence-based recommendations and active monitoring role, Italy’s Women’s Business Committee offers a valuable example of effective dialogue between government and women entrepreneurs. The initiative has strengthened the country’s policy ecosystem for inclusive and sustainable enterprise development and could serve as a good practice model for Albania in fostering structured engagement and targeted support for women in business.
Source: Italian Ministry of Enterprises and Made in Italy (n.d.[79]).
Develop targeted interventions through comprehensive support programmes for women entrepreneurs in ICT and STEM sectors. The government could spearhead a multi-stakeholder initiative involving universities, technology hubs and private sector partners, with a strong focus on ensuring both sustainability and scalability. Such a programme should offer integrated support that combines technical training, mentorship from experienced tech entrepreneurs, structured networking opportunities and tailored access to finance, including links with women venture capitalists and angel investors. The initiative would aim to strengthen participants’ digital, entrepreneurial and leadership skills while addressing the specific barriers women face in technology-driven industries. Key components could include accelerators and incubators for women-led start-ups, international partnership schemes to support market entry and peer learning networks to counter isolation in male-dominated sectors. Implementation should adopt flexible delivery models that accommodate work-life balance, provide childcare support during training and include dedicated funding windows with lower collateral requirements. Aligning the programme with broader national strategies and tracking its impact would help ensure measurable progress in improving gender balance and fostering growth within Albania’s tech ecosystem.
Integrate childcare and care support solutions into entrepreneurship and SME support policies. Albania should move beyond treating childcare and family support as stand-alone social policies and explicitly embed them within entrepreneurship and SME development frameworks. This could include piloting childcare vouchers or cost-sharing schemes linked to start-up and self‑employment programmes, prioritising rural and underserved areas where market provision is weak. Delivery could be co-ordinated through local governments and business support centres, with flexible models (extended hours, part-time provision, mobile or community-based childcare) aligned to the realities of self-employment. In parallel, entrepreneurship agencies and employment services should be mandated to provide clear, proactive guidance on maternity and parental entitlements for self-employed women, ensuring that information is systematically communicated at business registration, licensing and programme entry points.
Against a backdrop where rapidly evolving global markets outpace the capacity of Albania’s education and training systems to deliver a fully skilled workforce, it is evident that human capital development on its own is insufficient: for SMEs, which often struggle with limited financial and human resources, developing and leveraging social capital – the networks, trust and shared norms that underpin co-operation and resilience – is essential.
The social economy31 offers an important vehicle for SMEs in Albania to both build and benefit from social capital. By participating in these networks, businesses can access alternative knowledge flows, share resources and co-develop innovative solutions to both economic and social challenges. While the social economy is gaining significant traction globally, with over 4.3 million organisations and 6.3% of the workforce in Europe alone (European Commission, 2025[80]), it remains in its nascent stages in Albania, presenting both challenges and opportunities for broader uptake and integration.
Against this backdrop, this section examines the key building blocks for strengthening the social enterprise ecosystem, focusing on improved mapping alongside the development of a more supportive legal and institutional environment.
5.3.1. Mapping the social enterprise landscape
Understanding the structure and scope of the social enterprise landscape is a necessary first step in fostering the development of the broader social economy. Although Albania introduced a legal requirement for businesses to register as a social enterprise in 2019, alongside plans to establish an electronic database managed by the Ministry of Health and Social Protection, implementation remains incomplete. The database has yet to be made publicly accessible, although efforts are currently underway to improve its functionality and user access. The absence of a functional electronic register therefore constrains policymakers’ ability to systematically map social enterprises and, in turn, to understand their size, characteristics and support needs.
A further limitation stems from institutional fragmentation. The database is maintained separately from the Statistical Business Register administered by INSTAT, which serves as the core administrative source for economic data used in national statistics and labour market analysis. As INSTAT does not manage sector-specific registers held by other authorities, integrating social enterprises into the SBR framework would require a clear and harmonised statistical methodology, including aligned definitions and classifications, which are not yet established. In the absence of such alignment, data integration across systems remains constrained, limiting the ability to assess the economic footprint of social enterprises within broader business statistics.
Despite these constraints, some progress has been made in formal recognition. As of August 2025, 13 businesses were officially registered as social enterprises.32 The database records key information such as sector of activity, tax and licence numbers and the date and reference number of the Ministry’s decision granting social enterprise status, allowing for a partial assessment of enterprise maturity based on the registration timeline. Even though relatively few are formally registered, a greater number of de facto social enterprises are operating in practice, with an estimated 379 currently active (World Economic Forum, 2024[81]). Many of these entities focus on empowering disadvantaged groups (Box 5.6).
While social enterprises may pursue a wide range of missions, many prominent examples in Albania focus on promoting the inclusion of disadvantaged groups in both the labour market and society. These enterprises highlight the social economy’s diverse potential to address social and economic marginalisation:
Women: The enterprise, “My Craft Tradition”, empowers women in vulnerable situations by equipping them with skills in traditional weaving and looming. The enterprise is housed in a former asset confiscated from organised crime, symbolically repurposed to serve social good. Women artisans produce and sell handcrafted items (e.g. carpets, rugs, bags, decorative covers) on both local and international markets.
Roma communities: “Versitas Albania” is dedicated to improving educational and employment outcomes among Roma youth. By supporting students through to graduation and into the workforce, the initiative also aims to cultivate a new generation of Roma professionals, community leaders and role models.
Persons with disabilities: The Albanian Disability Rights Foundation promotes the full inclusion of persons with disabilities in all areas of public life. In addition to offering policy expertise and awareness-raising activities, the foundation runs the economy’s only wheelchair manufacturing facility, helping to meet the mobility needs of an estimated 7 000 individuals.
Source: OSCE (2024[82]).
5.3.2. Creating an enabling environment for social enterprises
These initial steps in formalising and documenting the sector reflect broader efforts by Albanian authorities to institutionalise social entrepreneurship. Notably, Albania was the first WBT economy to introduce a stand‑alone legal framework for social enterprises, with the adoption of the Law on Social Enterprises in 2016 (Government of Albania, 2016[83]). Since then, it has developed a relatively comprehensive set of secondary legislation and operational procedures to bolster the law’s implementation (Table 5.8).
Yet, the existing legal framework reflects a tension between a conceptually inclusive vision and the practical constraints imposed by restrictive eligibility rules. Although the Law on Social Enterprises formally recognises various social impact areas (e.g. employment generation, environmental protection, cultural activities), it simultaneously mandates that at least 30% of social enterprises’ employees belong to socially or economically disadvantaged groups.33 This provision effectively limits the model to one of work integration, reinforcing a perception of social enterprises primarily as mechanisms for supporting vulnerable populations. This interpretation is further reinforced by the designation of the Ministry of Health and Social Welfare – rather than the Ministry of Economy, Culture and Innovation, which oversees both business registration and employment affairs – as the responsible institution. Together, these features frame social enterprises chiefly as tools of social assistance policy, rather than as entrepreneurial actors capable of generating broader social and economic value.
The law’s narrow approach to legal form further compounds these limitations. While it establishes clear criteria for obtaining the status of “social enterprise”,34 it restricts eligibility to non-profit organisations. This excludes a wide array of potential models (e.g. limited liability companies, sole proprietorships, co-operatives) that may pursue social aims and operate effectively as de facto social enterprises. As a result, the legal framework constrains both the diversity of actors that can participate and the range of organisational forms through which social impact can be achieved.
These limitations within the main law are further compounded by inconsistencies in the broader legal and fiscal framework governing social enterprises. In particular, gaps and ambiguities in financial and tax-related provisions undermine the predictability and attractiveness of the model. Under the Law on Social Enterprises, any profit generated through economic activity is subject to the profit tax, thereby treating social enterprises similarly to traditional businesses. However, the Law on Non-Profit Organisations provides that non-profit entities engaging in economic activity may be exempt from profit tax and benefit from a three-year value-added tax (VAT) exemption if they provide social, educational, cultural or sports-related services (Hoxha and Haska, 2019[85]). These conflicting provisions create uncertainty for social enterprises regarding their tax obligations and potential benefits. Earlier drafts of the Law on Social Enterprises (developed between 2010 and 2016) reportedly included provisions for reduced VAT rates, but the Ministry of Finance opposed these measures, contributing to the current absence of tax incentives in the final law (Hoxha and Haska, 2019[85]). As a result, the legal framework fails to provide a coherent or enabling fiscal environment for social enterprises, potentially discouraging formalisation and limiting sector growth.
These limitations in the existing legal framework have contributed to the absence of robust support programmes for social enterprises in Albania, which continue to face significant operational challenges. A key issue is securing adequate financial support, especially for younger entrepreneurs. In one 2024 survey, 88% of young social entrepreneurs identified limited access to funding as a key barrier to launching their ventures (People in Focus, 2024[84]). Acknowledging the need to foster a supportive financial environment for these actors, the government has issued several directives since 2018 to guide the provision of state support through the Social Enterprise Fund (Table 5.8). The most recent directive, adopted in 2023, earmarked ALL 240 million (EUR 2.5 million) to support social enterprises between 2023 and 2025 (Government of Albania, 2023[86]). However, earlier implementation of the fund between 2019 and 2021 revealed significant barriers to access. Of the eight registered social enterprises at the time, only four submitted applications, and all were disqualified due to challenges in meeting extensive documentation requirements (Sherifaj, 2022[87]).35 Those that did not apply often cited difficulties in preparing the required materials (particularly related to business plans) as well as the short timeframe available. These challenges underscore a persistent gap in the current support system, as many social enterprises evidently lack the technical capacity to engage effectively with public funding opportunities.
This capacity gap is not limited to financing procedures. More broadly, 56% of young social entrepreneurs report lacking the business skills needed to start and sustain a venture (People in Focus, 2024[84]). Despite this, the government currently does not offer business development support to social entrepreneurs or prospective social enterprises. In response, non-governmental organisations have stepped in to fill this void. For instance, Partners Albania provides training, coaching and mentoring services, including targeted programmes36 to improve youth social entrepreneurs’ understanding of operational management, legal requirements and impact measurement – foundational knowledge for both the creation and long-term viability of social enterprises.
The way forward
Amend the Law on Social Enterprises to broaden the range of organisational models eligible for social enterprise status and reconsider the mandatory 30% disadvantaged employment requirement in order to broaden social enterprise diversity. Given the low number of registered social enterprises, gradually expanding eligible legal forms, potentially to include entities such as co-operatives or mission-driven limited liability companies, could help attract a broader range of social impact initiatives, strengthen the sector’s entrepreneurial capacity and align Albania more closely with European practice, where social enterprises operate across multiple legal structures and pursue diverse social missions. The experience of the Brussels-Capital Region of Belgium offers a relevant example (Box 5.7).
At the same time, legislative reforms should ensure that the role of the non-profit sector is not weakened and that organisations working with vulnerable groups continue to have access to existing funding streams. Complementary efforts should also focus on raising awareness of social entrepreneurship and clarifying how hybrid organisational models can balance financial sustainability with social objectives, helping build trust among stakeholders and avoid perceptions that profit motives may override social impact.
Transfer institutional responsibility for social enterprises to the Ministry of Economy, Culture and Innovation. The Ministry of Health and Social Welfare currently oversees social enterprises, framing them primarily as social assistance tools rather than entrepreneurial actors. The Ministry of Economy, Culture and Innovation oversees business registration and employment affairs, making it better positioned to support social enterprises as economic actors capable of generating financial, cultural and social value. Transferring responsibility would align social enterprise policy with broader entrepreneurship and innovation strategies, improve co-ordination with business support services, enhance access to economic development programmes, and strengthen the sector’s entrepreneurial identity while maintaining its social mission.
Establish dedicated business development support programmes for social entrepreneurs. Structured support programmes are needed to address the barriers social entrepreneurs face in developing the business and management skills required to grow and sustain their ventures. Such initiatives should combine practical training with advisory and mentoring components tailored to the specific needs of social enterprises, helping participants strengthen their business planning, financial management and innovation capacities. Ensuring nationwide accessibility through in‑person and digital formats would promote equitable participation and enhance the long-term viability and competitiveness of the sector.
In 2018, the Brussels-Capital Region adopted an Ordinance on Social Enterprises to provide legal recognition and tailored support for social enterprises, defined as “private or public legal entities that implement an economic project, pursue a social purpose, and exercise democratic governance.” Until this point, social enterprises had been mainly concentrated in the work integration sector, and the 2018 reform expanded the definition of social enterprise beyond traditional work integration, recognising diverse business models that create social value across multiple fields such as environment, education and community services.
The legal framework was developed through a participatory process co-ordinated by the Brussels‑Capital Region’s Ministry of Employment and Economy that involved stakeholders like social enterprise federations, trade unions, academics, public agencies and civil society through consultations, surveys and pilot testing to ensure the new framework reflected social enterprises’ operational practices and needs. This collaborative design process generated broad legitimacy, provided clear legal definitions and improved access to funding.
The Brussels reform demonstrates how expanding the legal definition and scope of social enterprises can help unlock sector growth and diversity, offering a useful reference for Albania for modernising its own framework and fostering a more entrepreneurial, inclusive social economy.
Source: European Commission and OECD (n.d.[88]).
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← 1. Regarding primary and lower secondary education (grades 1-8), entrepreneurship is incorporated through the mandatory subject, “Citizenship.” In upper secondary school, in grade 12, students must take the “Economy” subject, which has modules related to skills for success, personal finance, business ethics and becoming an entrepreneur.
← 2. Of note, Junior Achievement of Albania was the first of the global Junior Achievement network to achieve this 100% coverage. See: https://www.en.junior-albania.org/.
← 3. The EU4Youth project, scheduled from 2024 to 2027, is co-ordinated by the UNDP and has a budget of USD 544 000. It seeks to strengthen the local ecosystem required for delivery, including the development of local partners’ networks in the three pilot municipalities. These networks are tasked with providing training, counselling, and pre- and post-placement support. The EU4Youth project also supports preparations for the national rollout by contributing to the development of the Youth Guarantee Implementation Plan (2025-2027), which remains under preparation, and by embedding robust monitoring and evaluation mechanisms to inform future scale-up. For more information, see UNDP (2024[89]).
← 4. The portal aims to function as a one-stop gateway for job offers, training and upskilling opportunities, counselling and information on available support programmes.
← 5. Data provided by the Albanian government during the assessment period.
← 6. Ibid.
← 7. One key mechanism for institutionalising private sector engagement is through sector skills committees, which are formal, multi-stakeholder bodies that bring together representatives of employers, employer associations, trade unions, education and training providers, and public authorities to identify, anticipate, and address skills needs within a specific economic sector. They are commonly used to strengthen alignment between education systems and labour market needs. These committees are detailed in additional detail in Table 5.5.
← 8. Input from the European Training Foundation.
← 9. Instruction No. 1090, dated 12 December 2024, “On the procedures for planning and implementing vocational education and training in the dual system,” https://qbz.gov.al/eli/udhezim/2024/12/12/1090/8f0037f0-b54c-4fd1-bc0c-a514e11d94a1.
← 10. Figures provided through qualitative questionnaires developed as part of the current assessment process.
← 11. This average excludes Türkiye.
← 12. This figure was provided by INSTAT as part of the quantitative questionnaires during the assessment period.
← 13. “Skills intelligence” can be defined as the “process of identifying, collecting, analysing, synthesising and presenting quantitative or qualitative information on skills and the labour market to: (i) identify key trends and demands in the labour market, (ii) assess, anticipate and forecast skills needs, (iii) address skills gaps and mismatches and (iv) adapt provision of education and training accordingly.” For more information, see: https://www.cedefop.europa.eu/en/tools/vet-glossary/glossary/kompetenzanalytik.
← 14. It is worth noting that INSTAT’s forthcoming Five-Year Programme of Official Statistics 2027-31 aims to address this gap by expanding statistical activities, enhancing data production and sharing and strengthening co-operation with administrative data providers.
← 15. The emigration rate is estimated by dividing the number of emigrants originating from a given economy (Mi) by the sum of those emigrants and the total native population from that economy, whether residing domestically or abroad (Mi + Ni). To approximate the total native population (Ni), the number of foreign-born residents (immigrants) – as reported in the United Nations Department of Economic and Social Affairs international migrant stock by destination – is subtracted from the economy’s total population.
← 16. The 9.4% unemployment figure refers to the population aged 15-64. Both long-term unemployment figures refer to population aged 15-74. For more information, see: https://www.instat.gov.al/en/themes/labour-market-and-education/employment-and-unemployment-from-lfs/#tab2; https://ec.europa.eu/eurostat/databrowser/view/une_rt_a/default/table?lang=en.
← 17. It is important to note that labour shortages in Albania are not driven by skills mismatches alone. Evidence from recent years suggests that shortages, particularly in sectors such as accommodation and food services, are also linked to working conditions, including low wages, seasonal employment, long or irregular working hours and limited career prospects. The issuance of a significant number of work permits to foreign seasonal workers, notably from the Philippines and Bangladesh, during peak tourism periods further indicates challenges in attracting domestic workers to these jobs despite high unemployment.
← 18. This programme, implemented by the National Agency for Employment and Skills, is delivered through public vocational training centres across the economy. The curriculum is divided into 2 levels and contains the 5 basic digital competencies according to the EU Digital Competencies Framework 2.0. During its first year (2023), approximately 2 400 persons were enrolled. For 2025, an estimated 2 500 unemployed job seekers were expected to attend this course. For more information, see: https://aftesi.puna.gov.al/drejtime/110.
← 19. For a more detailed look at the demand for digital skills in the agriculture sector, see: https://www.etf.europa.eu/sites/default/files/2024-11/Albania_digital%20summary.pdf.
← 20. This digital platform provides real-time data on markets and prices on key products as well as active support schemes available to farmers. For more, see: https://albaniandailynews.com/news/farmer-s-portal-increases-transparency-agricultural-minister.
← 21. Case studies across Korçë, Dibër, and Vlorë demonstrate that digital tools can significantly improve agricultural outcomes, including higher yields, reduced input use, better fruit quality, and more efficient water and disease management. For more information, see: https://farmonaut.com/precision-farming/smart-precision-farming-in-albania-boost-apple-orchard-yields.
← 22. This initiative, jointly carried out by the International Labour Organization, the Food and Agriculture Organization, and the International Telecommunication Union seeks to equip Albania’s rural workforce with digital skills to increase the productivity, growth and competitiveness of the agri-food sector (and to enhance rural livelihoods). For more information, see: https://www.ilo.org/projects-and-partnerships/projects/digital-agriculture-and-rural-transformation-albania-dart.
← 23. Digital Valley Albania is part of the European Digital Innovation Hub network, which seeks to support the digital transformation of SMEs, particularly those in the tourism and agriculture sectors, in Albania. See: https://divalbania.eu/?utm#Mission.
← 24. This regional average excludes Türkiye. For more information, see: OECD (2025[16]).
← 25. This ranking excludes Türkiye, as it is not included in the World Bank report from which this statistic is taken.
← 26. Referenced against the European Qualifications Framework (EQF), these roles would fall between EQF Level 3 (for those entry-level operators, assistants or basic maintenance technicians that perform more routine tasks) to Level 5 (higher-grade technicians or operators).
← 27. These include programmes on the Installation and Maintenance of Solar Panels, Photovoltaic Systems and Dry Building Systems.
← 28. One such project is GIZ’s “Promoting regional economic development in Albania through improved vocational education and training” (ProSEE 2.0), which runs from 2022 to 2026. Two of the initiative’s main components are modernising VET qualifications and curricula to integrate green (and digital) elements and supporting SMEs by introducing green business elements. See: https://www.giz.de/en/projects/sustainable-economic-and-regional-development-employment-promotion-and-vocational-0.
← 29. While there is no standard definition for what constitutes “specialised AI knowledge and skills,” this tends to involve computer programming, database management (especially for big data) and skills for data analysis and visualisation. It might also involve knowledge on specific AI models, tools or software. For more information, see: https://www.oecd.org/en/publications/oecd-employment-outlook-2023_08785bba-en/full-report/skill-needs-and-policies-in-the-age-of-artificial-intelligence_fe530fbf.html.
← 30. Data provided by INSTAT.
← 31. The OECD defines the social economy as “made up of a set of organisations such as associations, cooperatives, mutual organisations, foundations, and, more recently, social enterprises. In some cases, community-based, grassroots and spontaneous initiatives are part of the social economy in addition to non-profit organisations, the latter group often being referred to as the solidarity economy. The activity of these entities is typically driven by societal objectives, values of solidarity, the primacy of people over capital and, in most cases, by democratic and participative governance.” For more, see: https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0472.
← 32. Information provided by Albanian government during the assessment period.
← 33. The specific categories of “disadvantaged groups” are determined by a decision of the Council of Ministers, but generally refers to those facing extreme poverty, social exclusion due to discrimination, long-term unemployment, difficulties due to being criminally prosecuted or under the influence of drugs and alcohol, and displaced persons.
← 34. As defined in Article 7 of the Law on Social Enterprises, the main criteria are: engage in an economic activity, offering goods or services; pursue a primary social objective; reinvest the majority of profit or surplus to achieve social objectives and prevent profit distribution; be managed in a transparent and accountable way and respect labour legislation and guarantee equal opportunities and non-discrimination.
← 35. Required documentation for applying for support as a social enterprise includes: legal and court documents such as the registration decision, statute, court extract, and proof that the organisation is not subject to bankruptcy or liquidation proceedings; administrative information including a completed and signed application form, the taxpayer identification number (NUIS/TIN), and a signed and stamped CV of the organisation; financial documents such as the previous year’s financial statements (if applicable), tax declarations and payment forms, proof of settled tax obligations (no older than one year), the financial balance for the previous year, a bank certificate demonstrating 30% of the planned business budget is available, and bank confirmation of IBAN and authorised signatories; and employment and insurance documentation including details on the number of employees and their salaries, proof of social and health insurance contributions for the past three months, and a labour inspection report where applicable. For more information, see: Sherifaj (2022[87]).
← 36. A good example of such efforts is the 2023 training programme “Social Enterprises Management and Social Impact Measurement,” a five-day course designed for 15 young social entrepreneurs (aged 18-30). The programme aimed to strengthen participants’ knowledge of operational and financial management, support them in testing or refining their business models, and build their understanding of the legal framework and process for obtaining social enterprise status, as well as methods for measuring social impact. The training was complemented by a study visit either within Albania or to one of the programme’s partner countries (Serbia, Croatia, Slovenia or North Macedonia). For more information, see: https://www.partnersalbania.org/News/call-for-participation-training-social-enterprises-management-and-social-impact-measurement-study-visit-in-social-enterprises-in-balkan/.