Entrepreneurs' attitudes toward business support structures in Albania: Institutional clash?

Entrepreneurship and small business development have been among the most emphasised phenomena in the post-communist transition economies. Apart from the conventional view on SMEs as the engines of growth in transition economies, the macroeconomic "textbook" approach that was taken in transition neglected the problems of the SME sector. A heavy emphasis was placed on the SME sector as having "system transformation capacities". However, the SME development right now reflects rather than influences the efficiency of institutions. Recently, there has been an emphatic shift in transition studies away from a focus on markets to institutions needed to orient the entrepreneurial spirit toward capital formation, investment, export expansion, the generation of new jobs, and fair competition which will lead to economic growth. This paper reports on some of the findings of a PhD research study whose broader aim is to explore the impact that institutions (formal and social) have on SME growth in post-communist transition economies. The research is focused on the case of Albania which despite broad similarities with other transition countries, related to the transition process itself, has its particular historical, economic, political and social features which give a specific shape to institutional issues. The analysis is placed in the framework of the business support infrastructure and the behaviours and attitudes it induces. Interview data from business support providers and SMEs show that the support structures are not responding to the particular needs of SMEs and to the socio-economic changes in Albania. This has led to the growth of scepticism and an increasing reluctance to use these services. Together with a lack of business culture and the non-conducive business environment they have negatively affected the business choices and decreased the exposure to a whole range of business opportunities. The paper concludes that SME policies and support structures should be designed to promote the long-term prospects of SME development and that they should make a better and more innovative use of the resources available considering the economic and social situation in Albania.