Small and medium-sized enterprises (SMEs) are a cornerstone of the economies of the Western Balkans and Türkiye, contributing 72% of regional employment and 64% of value added. Their ability to compete and integrate into markets will be a key determinant of regional productivity and growth, and of the pace of convergence with the European Union.
Efforts to strengthen SMEs’ competitiveness and productivity take place in a rapidly evolving global environment. Accelerating digital transformation, and the transition to more sustainable production models are reshaping how firms compete, produce and integrate into markets, while heightened geopolitical uncertainty is affecting supply chains, investment flows and market access. These developments create new opportunities for SMEs, but also place greater demands on firms with limited resources to adapt, innovate and respond to shocks.
The seventh edition of the SME Policy Index: Western Balkans and Türkiye provides a comprehensive assessment of SME policy progress and challenges and offers reform pathways for the region’s governments. This edition draws on good practices from OECD and EU member states, analyses interdependencies across policies shaping the SME ecosystem, helps identify cross-cutting policy bottlenecks and highlights where coordinated reforms can deliver the greatest impact.
The assessment identifies four interrelated priorities for policy action in the Western Balkans and Türkiye:
Strengthening SME policy effectiveness requires coherent policy frameworks and a consistent, evidence-based approach across the policy cycle. While most economies have developed multiple SME-related strategies and instruments, these remain fragmented across institutions and policy areas, limiting coherence and implementation capacity. Addressing this will require stronger coordination, clearer institutional mandates and better prioritisation of existing frameworks. Strengthened monitoring and evaluation, alongside closer tracking of market dynamics, will be critical to improving responsiveness and ensuring support remains fit for purpose.
Enhancing green growth opportunities for SMEs also requires an emphasis on effective policy implementation. Coordination across ministries and stakeholders should be strengthened, support schemes better aligned, and a balanced mix of financial and non-financial instruments are needed, alongside a stronger enabling framework for sustainable finance.
Advancing SME digital transformation requires moving beyond the adoption of basic digital tools towards their effective integration and productive use. Currently, adoption remains concentrated in basic applications, with fewer than 25% of firms using more advanced solutions such as cloud computing and enterprise resource planning, and fewer than 15% using customer relationship management system. Policy approaches should combine accessible, demand-driven instruments for initial uptake with targeted support for scaling, integration and organisational change, alongside measures to strengthen digital capabilities and workforce skills.
Addressing labour and skills shortages is critical to competitiveness and for enabling the green and digital transitions. Businesses across the region report persistent recruitment difficulties, affecting between 40% and 75% of firms. These shortages reflect low participation in adult learning and structural mismatches between training systems and evolving labour market needs. Strengthening skills anticipation and improving the responsiveness of education and training systems will be essential to support adaptation to the ongoing economic transformation.
This report is a key output of the OECD South East Europe Regional Programme. It was developed through extensive dialogue and data collection with over 500 stakeholders across the region, and with the support of the European Commission.
This report reflects OECD’s and the European Union’s shared commitment to support the region in the shift from policy design to effective implementation and to help build a dynamic and resilient SME sector that is equipped to thrive in an increasingly complex global economy.
Mathias Corman
OECD Secretary-General
Marta Kos
EU Commissioner for Enlargement