Fostering Small Business Development in Moldova through Innovative Policies

Abstract

This work considers the role of small and medium-sized enterprises (SMEs) within an economy and their capacity for innovation. In particular, attention is focused on the case of the Republic of Moldova, first providing an analysis of the market shares and the profits achieved by SMEs. Subsequently, based on the analyses carried out, it is possible to observe that although in recent years there have been variations in economic indicators, favourable for the increase in the innovation capacity of SMEs, at the same time, there are some conditions that act as a brake on an increase in innovation capabilities. Among these conditions, we can consider the reduced cooperation between the enterprises that form the SMEs, the intense concentration of the SMEs in a single specific space in the territory and the difficult mobilisation of tangible and intangible capital from one place to another. A reduce number of SMEs are involved in innovation activities; as a result, innovation impact on national economy is reduced as well. The overlapping crises from the last years, also hit hard the SMEs slowing down their potential to develop and innovate. Still, it is necessary to consider that Republic of Moldova was officially granted candidate status by the European Union in 2022, setting a target date of 2030 for EU membership. The European path of the country increased considerable developmental policies stimulating the speed and depth of economic and financial reforms. Moreover, some developmental policies concerning the support for SMEs referred to legislative amendments dealing with the economy’s digitalisation. Other policies concern the improvement of the legal framework in the competition field. The materialization of these opportunities can create an enormous synergy effect for attracting funds for SMEs development and innovation. UDC: 334.012.64:001.895(478); JEL: G00; G30