Title page 1

Contents 8

Foreword 4

Acknowledgements 6

Reader's guide 13

Acronyms and abbreviations 17

Executive summary 21

Montenegro: SME definition and data coverage 23

Montenegro: SME sector overview 27

1. Assessment findings by policy dimension 36

2. Creating an enabling environment for SMEs and entrepreneurs 103

2.1. Promoting an SME-friendly policy and institutional design 104

2.1.1. Reinforcing regulatory, institutional and policy frameworks for SME lifecycle support 104

2.1.2. Securing systematic, comprehensive and transparent dialogue between policymakers and SMEs 107

2.2. Leveling the playing field for SMEs 109

2.2.1. Reducing informal competition for SMEs 109

2.2.2. Protecting and monitoring fair market competition 111

2.2.3. Providing efficient judicial and out-of-court dispute resolution mechanisms 113

2.3. Facilitating access to finance for SMEs' operations and growth 116

2.3.1. Facilitating bank lending to SMEs 117

2.3.2. Providing alternatives to bank finance 119

2.3.3. Providing direct financial support to SMEs' operations and growth 122

2.4. Providing services essential to SMEs' operations and growth 126

2.4.1. Foundational SME business support services 126

2.4.2. Support services for SMEs' expansion and growth 129

References 133

3. Fostering SME sustainability and resilience 145

3.1. Harnessing SME agility to navigate global market trends 146

3.1.1. Smoothing SME pathways to a green economy 146

3.1.2. Boosting SME competitiveness in sustainable value chains 149

3.2. Building robust mechanisms for SMEs to prevent and manage crises 153

3.2.1. Enhancing crisis-resilient strategies to prevent SME bankruptcies 153

3.2.2. Increasing SME recovery capacity and second-chance opportunities 155

3.3. Enabling SMEs by providing them with access to sustainable financing solutions 157

3.3.1. Supporting SMEs in an evolving sustainable finance framework 157

3.3.2. Increasing SME access to sustainable (bank and alternative) financing 159

3.4. Strengthening SME support systems and networks for sustainable growth 162

3.4.1. Scaling up public non-financial support for SMEs in a green and resilient economy 163

3.4.2. Exploiting the power of networks for the sustainable growth of SMEs 164

3.5. Accelerating research and innovation to future-proof SMEs 168

3.5.1. Advancing strategic innovation for a green and resilient economy 169

3.5.2. Capitalising on knowledge networks for driving SME innovation 170

Annex 3.A. SME network definition 174

References 175

4. Supporting the digital transformation of SMEs in Montenegro 182

4.1. Strengthening SME readiness for the digital transformation 183

4.1.1. Strengthening policy and financial support for SME digital transformation 183

4.1.2. Assessing the digital maturity of SMEs in Montenegro 186

4.1.3. Enhancing digital skills and capacities 189

4.2. Increasing SME productivity through digitalisation 193

4.2.1. Leveraging the use of e-commerce and online platforms to drive SME growth 194

4.2.2. Fostering innovation and collaboration for SME productivity 196

4.3. Establishing a trustworthy and safe business environment 202

4.3.1. Adapting data protection to evolving digital threats 203

4.3.2. Strengthening SME cybersecurity resilience 204

4.4. Supporting sustainable uptake of advanced technologies 208

4.4.1. Encouraging SME adoption of artificial intelligence and emerging technologies 209

4.4.2. Promoting a sustainable digital transformation 213

References 219

5. Harnessing human and social capital for SME development in Montenegro 226

5.1. Building foundational human capital for SME competitiveness 227

5.1.1. Fostering entrepreneurial skills and mindsets through education 227

5.1.2. Bridging the divide between education and training systems and SMEs 230

5.2. Developing SME workforce knowledge and skills 235

5.2.1. Understanding and anticipating skills needs 236

5.2.2. Addressing skills needs of SMEs through adult education 239

5.2.3. Upskilling to support AI adoption and use 242

5.2.4. Improving talent availability by empowering women entrepreneurs 244

5.3. Strengthening social capital by advancing social entrepreneurship 250

5.3.1. Mapping the social enterprise landscape 250

5.3.2. Creating an enabling environment for social enterprises 251

References 255

Annex A. Methodology 267

Annex B. Western Balkans Business Survey - Navigating the Digital and Green Transition 274

Table 1. Definition of micro, small and medium-sized enterprises in Montenegro 23

Table 2. Core statistical sources for the SME sector overview, Montenegro 24

Table 3. Statistical data coverage by thematic area, Montenegro 25

Table 4. Compound annual growth rate by size class and indicator, Montenegro, 2021-2024 29

Table 5. MSME employment by size class, Montenegro, 2021 and 2024 30

Table 6. Sectoral profile of Montenegro's business economy, 2024 shares and 2021-2024 growth 30

Table 7. Value added efficiency by size class, Montenegro, 2024 and 2021-2024 change 32

Table 1.1. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 1, Sub-dimension 1.1 38

Table 1.2. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 1, Sub-dimension 1.2 40

Table 1.3. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 2, Sub-dimension 2.2 42

Table 1.4. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 2, Sub-dimension 2.3 43

Table 1.5. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 3, Sub-dimension 3.1 45

Table 1.6. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 3, Sub-dimension 3.2 46

Table 1.7. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 3, Sub-dimension 3.3 48

Table 1.8. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 4, Sub-dimension 4.1 50

Table 1.9. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 4, Sub-dimension 4.2 51

Table 1.10. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 4, Sub-dimension 4.3 52

Table 1.11. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 4, Sub-dimension 4.4 52

Table 1.12. Montenegro's implementation of the SME Policy Index's 2022 recommendations on Dimension 5a, Sub-dimension 5a.1 56

Table 1.13. Montenegro's implementation of the SME Policy Index's 2022 recommendations on Dimension 5a, Sub-dimension 5a.2 58

Table 1.14. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 5b 61

Table 1.15. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 6, Sub-dimension 6.1 64

Table 1.16. Montenegro's implementation of SME Policy Index's 2022 recommendations for Dimension 6, Sub-dimension 6.2 65

Table 1.17. Montenegro's implementation of SME Policy Index's 2022 recommendations for Dimension 6, Sub-dimension 6.3 66

Table 1.18. Montenegro's implementation of the SME Policy Index's 2022 recommendation for Dimension 7, Sub-dimension 7.1 68

Table 1.19. Montenegro's implementation of the SME Policy Index's 2022 recommendation for Dimension 7, Sub-dimension 7.2 69

Table 1.20. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 8a 73

Table 1.21. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 8b, Sub-dimension 8b.3 77

Table 1.22. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 8b, Sub-dimension 8b.4 78

Table 1.23. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 9, Sub-dimension 9.1 80

Table 1.24. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 9, Sub-dimension 9.2 81

Table 1.25. Montenegro's implementation of the SME Policy Index's 2022 recommendations for Dimension 10, Sub-dimensions 10.1 and 10.2 86

Table 1.26. Montenegro's implementation of the SME Policy Index's 2022 recommendation for Dimension 10, Sub-dimension 10.3 87

Table 2.1. List of credit guarantee schemes supporting SME access to bank finance in Montenegro, 2026 119

Table 2.2. List of programmes supporting the development of private equity in Montenegro 121

Table 2.3. Overview of main active programmes that provide targeted funding to SMEs in Montenegro, 2026 123

Table 2.4. Institutional non-financial SME internationalisation support instruments in Montenegro 130

Table 3.1. Montenegro's strategic and policy frameworks for SME greening 148

Table 3.2. Reach of Montenegro's Programme for Improving Competitiveness of the Economy programme lines that support SME integration... 151

Table 4.1. Montenegro's strategic policy frameworks relevant for SME digitalisation and digital transformation 184

Table 4.2. Overview of Montenegro's financial instruments for SME digital transformation 186

Table 4.3. Montenegro's strategic and policy frameworks considering SMEs and their uptake of emerging technologies 209

Table 5.1. Examples of selected entrepreneurial competences' across the education system in Montenegro 228

Table 5.2. Select initiatives to promote girl students' participation in STEM/ICT fields in Montenegro 229

Table 5.3. Key provisions of "Guidebook for the Organisation and Implementation of School-based and Dual Practical Training at Companies" 231

Table 5.4. Key components of entrepreneurial support under the Youth Guarantee in Montenegro 232

Table 5.5. Overview of strategic approaches to skills intelligence in Montenegro 236

Table 5.6. Selected upskilling programmes for artificial intelligence in Montenegro 242

Table 5.7. Key strategic documents promoting women entrepreneurship in Montenegro 244

Table 5.8. Selected programmes facilitating women entrepreneurs' access to finance in Montenegro 246

Table 5.9. Key strategic documents guiding the development of social entrepreneurship in Montenegro 251

Boxes 11

Box 1.1. Spotlight: Building a single access point for SMEs in Montenegro 56

Box 1.2. Spotlight: A Just Transition Council - Building a resilient economy amidst the climate and energy transition 80

Box 1.3. Spotlight: Tourism 4.0: Piloting Immersive digital technologies in Montenegro's tourism sector 92

Box 2.1. Strengthening enforcement through digital identity and interoperable registries: Lessons from Estonia for risk-based monitoring... 116

Box 2.2. Good practice example: Development of lease finance in Poland 125

Box 2.3. Spotlight: From pilot to practice: Montenegro's Path to a Coordinated SME training needs assessment 128

Box 2.4. Good practice example: Accreditation and quality assurance of SME advisory services in Poland 132

Box 3.1. Spotlight: Ensuring SME competitiveness in sustainable value chains in Montenegro 151

Box 3.2. Good practice example: The Slovak Sustainable Energy Financing Facility (SlovSEFF III) 162

Box 3.3. Spotlight: Montenegro - boosting co-operation and internationalisation for sustainable SMEs 166

Box 3.4. Good practice example: Italy's Albo Circular Online Marketplace - enhancing business sustainability through industrial symbiosis 168

Box 3.5. Spotlight: ESG-aligned innovation through support by the Innovation Fund of Montenegro 171

Box 3.6. Good practice example: Measuring business R&D expenditures on clean technologies in Canada 173

Box 4.1. Spotlight: UNDP-EPAM partnership to strengthen digital skills and innovation in Montenegro 192

Box 4.2. Good practice example: Scaling SME digital and managerial skills through integrated acceleration programmes: France 193

Box 4.3. Spotlight: MontEDIH: Strengthening SME access to innovation and digital technologies in Montenegro 198

Box 4.4. Good practice example: Targeted SME e-commerce support through the "SME:Digital" programme in Denmark 201

Box 4.5. Good practice example: Place-based innovation at the High-Tech Campus Eindhoven in the Netherlands 202

Box 4.6. Good practice example: Building SME cybersecurity capacity through training and vouchers: The United States' Cybersecurity... 208

Box 4.7. Spotlight: Tourism 4.0: Piloting immersive digital technologies in Montenegro's tourism sector 211

Box 4.8. Good practice example: Germany - Accelerating SMEs' adoption of artificial intelligence through compute access, applied testbeds... 217

Box 4.9. Good practice example: Ireland's Climate Toolkit 4 Business for SME green and digital transition 218

Box 5.1. Good practice example: Supra-company training as a collaborative model for work-based learning provision in Austria 235

Box 5.2. Supporting women entrepreneurs in Montenegro through the Digital Platform for the Development of Women's Entrepreneurship 247

Box 5.3. Good practice example: Financing employer-led upskilling in Italy 249

Box 5.4. Spotlight: Addressing local challenges through social entrepreneurship in Montenegro 251

Box 5.5. Good practice example: Scotland's social enterprise support ecosystem 254

Table A A.1. Changes to the weights of thematic blocks 271

Table A A.2. Clusters and constituent policy dimensions 272

Table A B.1. SME target population in Western Balkans and Türkiye, 2025 274

Table A B.2. Western Balkans Business Survey: Navigating the Digital and Green Transition - Sections and subsections 275

Table A B.3. SME respondent sample in the Western Balkans and Türkiye, 2025 276