Fewer businesses are being created, enterprise birth rate lowest since 2010

2024-06-07 07:27:00, Ekonomi CNA

Fewer businesses are being created, enterprise birth rate lowest since 2010

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Every year fewer and fewer new businesses are created.

The birth rate of new enterprises (new businesses as a percentage of total active enterprises) in 2023 was the lowest since at least 2010 when the indicator is reported by INSTAT.

The new enterprises that were opened in 2023 constituted 10.5% of the active enterprises in the country, about 130 thousand. The indicator marked the lowest level since 2010 and was the same in 2020 when the economy was in crisis from isolation measures as a result of the Covid-19 pandemic.

More detailed data show that the largest number of new enterprises last year was in the service sector. Last year, a total of 13,000 new businesses were opened, where 84% of them were in the service sector and only 16% in the production sector.

With the rapid development in the tourism sector and the devaluation of the euro, there is a transfer of the economy from production to services. This shift is being reflected in the reduction of exports of goods and the reduction of the competitiveness of domestic production with imports.

The fall of the euro, higher costs of human resources and low demand from abroad has put Albanian producers in difficulties.

In general, fiscal and administrative conditions can affect a lower pace of opening new businesses and especially the regulatory burden related to obtaining permits and licenses.

Also, new businesses are highly dependent on human resources and their skills.

Albania's economy, after three decades of transition, is moving towards consolidation, instead of small retail units, there is now a focus on large networks. But in Albania, demographic developments are exerting double pressure on businesses.

Population reduction and dependence on old age is affecting a lower demand for goods for trade businesses. On the other hand, businesses as a whole, but also new ones, find it difficult to find employees due to the high emigration of young people.

A high level of education and job skills in the population can encourage the opening of new businesses, which can create a more favorable environment for entrepreneurship and innovation.

Counties with high immigration and older populations had the largest decrease in business stock last year according to the latest INSTAT data./ Monitor