The Analysis of the Conditions to Development of Small and Medium Business in Lubelskie Province

Abstract

One of the characteristic features of social and economic changes in Poland over the last ten years is a dynamic development of small and middle-sized firms. However, the firms vary depend on what kind of economic activity they carry out. Most of small and middle-size firms deal with wholesale and retail trade, estate management, education and building industry. A similar structure of firms can be noticed in major cities in the Lublin region, where trade firms and various services seem to predominate. Economic problems in Poland are directly connected with increasing regional differences. This implicates the existence of serious inner barriers for the development of particular regions. The analysis of the development of small and middle-size firms over the last years shows that this ecounters many barriers:

- financial barriers - the lack of money and low financial and legal stability;

- technological barriers - inefficient access to modern technology and the lack of money to finance modernization;

- market barriers - small interest in products, which is connected with the difficulties in acquiring goods and services;

- educational barriers - poor preparation for running a firm by means of modern techniques of organization, management, planning and marketing;

- problems which appear during the cooperation with local and regional institutions.

The above-mentioned barriers are also mentioned in the survey carried out as a part of the project entitled Innovation market in Lublin”. Half of the questioned people pointed to the lack of money and low financial stability as the main barrier of development. The next barrier mentioned was the influence of strong competition and the lack of funds to modernize the equipment to improve the standards of production and service. This means that their sensitivity to factors limiting development is the biggest. The analysis of the conveyed survey shows that the indispensable condition of development of MT companies is to facilitate the access to bank credits and to create a tax system which would be more just to firms of different size. The survey made it also possible to define the barriers for establishing a firm and its further development in the Lublin region. The most frequent are: high costs of setting up a firm, bureaucracy, limited access to funds, the lack of a clearly specified concept of the development of the Lublin region, fear of taking risk, the lack of an enterprise-friendly environment, the lack of knowledge about the institutions supporting various enterprises, problems connected with the necessity of acquiring different permissions and concessions and the lack of technological solutions initiated by the needs of companies and firms.