The SME sectors across the WBT region share a common structural condition: enterprise bases that are expanding in breadth but not deepening in productivity, competitiveness or export capacity. Across much of the WB6, the micro tier continues to expand while the small and medium segments remain stagnant, fragile or contracting, pointing to a persistent difficulty in enabling firm graduation beyond subsistence or owner-operated scale. This pattern, documented in the individual economy chapters, points to a region-wide difficulty in enabling the transition from subsistence-scale self-employment to growth-oriented enterprise. The enterprise base is broad but structurally shallow.
Export performance illustrates the depth of this constraint, and it takes different forms across the region: in some economies, export value is highly concentrated in a narrow, large-enterprise tier, while in others, SMEs account for a larger export share but from a shallow, low-complexity and often fragile export base. In Serbia, SMEs account for 93% of exporting firms but only 34% of export value; in North Macedonia, 110 large enterprises generate approximately 72% of total exports. Kosovo’s manufactured export capacity of EUR 221 per capita is less than one-seventh of the WB6 average. In most economies, export propensity among small firms is low and declining, and in several cases, the OECD’s composite SME export-performance indicators have weakened over the past decade. Integrating SMEs more effectively into domestic and international supply chains, a theme assessed in Dimension 10 of each economy chapter, remains one of the central structural challenges for the region.
Demographic developments are compressing the time available for structural adjustment. Working-age populations are declining across most WB6 economies, with the World Bank projecting that labour shortages will become acute from 2030 in several countries without significant reforms (World Bank, 2025[2]). Albania’s working-age population has already contracted by 18% since 2011; North Macedonia is projected to lose 19-25% of its younger cohorts by 2030 relative to 2010. Emigration is depleting precisely the skill profiles – technology, engineering, applied sciences – that growth-oriented SMEs require. Youth unemployment, while declining from its post-2020 peaks, remains structurally elevated across the region, signalling a persistent mismatch between what education systems produce and what labour markets need. Türkiye’s demographic profile differs: its population continues to grow in the near term, but the share of young people not in employment, education or training stands at 23%, and net emigration has turned negative in recent years, introducing similar workforce pressures. The combination of a shrinking labour supply and rising skills mismatch limits the SME sector’s capacity to absorb productivity-enhancing technologies and compete with the large-enterprise sector for talent.
Access to finance remains a binding constraint for SME growth across the region, with the share of SMEs reporting to be credit-constrained ranging from 9.5% in Bosnia and Herzegovina to 41.8% in Türkiye over 2023-2025 (World Bank, 2026[3]). Overall, SMEs face tighter collateral requirements than larger firms, reflecting both higher perceived credit risk and more limited collateral availability. Instruments intended to ease lenders’ risk perceptions, notably credit guarantee schemes, remain unevenly developed in the WBT region, contributing to substantial cross-economy variation in SMEs’ access to bank finance. On this matter, Kosovo stands out as the regional economy with the most developed credit guarantee framework and is experiencing the strongest SME credit growth since 2019 (World Bank, 2025[4]). In parallel, non-bank financing instruments – capital markets, private equity, venture capital, crowdfunding, leasing, factoring – remain underdeveloped or absent in most regional economies, leaving SMEs with few alternatives to bank finance. Türkiye stands out as an exception, with SMEs increasingly using capital markets amid robust growth in private equity and venture capital. Looking ahead, the green and digital transitions required for EU integration will be both capital- and skills-intensive, while most SMEs currently lack the financial capacity and workforce to undertake them.
Against these structural constraints, several developments offer tangible scope for upgrading. The ICT sector has demonstrated across the region that a different growth trajectory is achievable: it generates disproportionate value added per worker, exhibits export orientation, and has attracted both domestic and foreign investment in Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia. The European Union’s Reform and Growth Facility and Instrument for Pre-Accession Assistance provide a financing channel for SME-focussed structural reforms. However, their impact depends critically on the capacity of national institutions to design and deliver programmes effectively. Policy frameworks have strengthened across the assessment period; Montenegro’s provisional closure of the EU enterprise and industrial policy chapter, and Türkiye’s macro-stabilisation trajectory all represent meaningful institutional progress. Whether these frameworks translate into broad-based enterprise upgrading will depend on closing the implementation gap identified by the individual economy assessments as the most pervasive constraint across the policy cycle.
