The report focuses on the process of implementing the Charter for Small Enterprises in the Western Balkans. The report represents the first comprehensive and comparative assessment of progress in the Western Balkan countries and UNMIK/Kosovo since they adopted the European Charter for Small Enterprises (the Charter) in 2003.

Small enterprises are the backbone of the Western Balkan economies. They make a major contribution to job creation and economic development and are behind the expansion of the services, construction and transport sectors that are driving economic growth in the region. Clusters of small enterprises moving into higher value added operations are emerging, spreading innovation throughout many parts of the Western Balkans.

Until a few years ago, small enterprise policy received relatively little attention in the region.The focus of governments was on consolidating macro-economic stabilisation, and on managing the restructuring and privatisation of large companies. Only limited support was available for small enterprises.

The adoption in 2003 of the European Charter for Small Enterprises – a pan-European instrument developed under the framework of the Lisbon Agenda – by all the Western Balkan countries and UNMIK/Kosovo contributed to a change in policy perspective. Since then, the Charter’s policy guidelines have become a key reference for enterprise policy development in the region.This report presents a first comparative assessment of progress in the Western Balkan countries and UNMIK/Kosovo since the Charter was adopted. It is structured around the Charter’s ten policy dimensions.The assessmentwas carried out by applying the SME Policy Index.The Index is acommon framework for evaluation, consisting of a set of qualitative and quantitative indicators that capture the critical components of each policy dimension. At the same time, the Index reflects the Charter’s broad and comprehensive approach to policy development. The assessment balances the results of government-led self-assessment with an independent evaluation co-ordinated by the European Commission (EC) and the Organisation for Economic Co-operation and Development (OECD), in consultation with the European Bank for Reconstruction and Development (EBRD) and the European Training Foundation (ETF). The report is intended to provide a contribution to the debate on enterprise policy development, promoting constructive dialogue among governments and representatives of the private sector, the donor community and other major stakeholders. It is a tool for policy planning and policy co-ordination at both the national and regional levels.