Abstract
Abstract Small and medium sized-enterprises (SMEs) are often seen as a sector important for job creation. About 2/3 of the overall employment is provided by this sector, both in the EU and in the Republic of Serbia. There is evidence that SMEs are responsible for the most part of the net employment growth. The SMEs sector in Serbia is identified as sector which can absorb a part of the unemployment generated by the large scale enterprises’ (LSEs) restructuring and privatization. Today, the unemployment rate in Serbia is high above the average unemployment rate in the EU. The question is whether the SMEs sector can absorb that unemployment, or is this sector more influenced by the crisis, relative to the LSEs. The aim of this paper is to examine the employment contribution of the SMEs in the Republic of Serbia. Furthermore, the paper will deal with the impact of the crisis on the SMEs’ employment, efficiency and their investment activities. The problems that are identified by SMEs, and that lead to rising unemployment in this sector over the past few years will be considered and analyzed.
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