Source: Lithuanian Development Agency for Small and Medium-sized Enterprises (SMEDA)

• Financial support provided by the Small and Medium-Size Business Promotion Fund
• Financial support offered by the Government and local authorities in accordance with the small and medium-size business development programs
• Consultancy and training services provided on favourable terms in accordance with the business development programs
• Services offered by business incubators, technological parks
• Skills improvement services offered on favourable terms under business development and employment programs
• Support to the establishment of new working places

Financial support provided by the Small and Medium-Size Business Development Funds

Since 1998 the number of municipalities providing the financial means from the municipal budgets to the Small and Medium-size Business (SMB) Development Funds has increased numerously. In 1998 29 municipalities out of 56 launched the SMB Development Funds.

In 2002 52 out of 60 local governmental institutions envisaged the budgetary allocations for the support to small and medium - size enterprises (SME) operating in their respective administrative territory.

The number of operational Funds increased as well as the financial allocations to them.

In 2001 the total allocations for SMEs support from the municipal budgets in Lithuania constituted 3,6 mln. Litas.

In 2002 the obvious growth of the budgetary allocations to the Funds may be observed. It is expected that by the end of the year 2002 Lithuanian SMEs will receive the support from Municipal Funds equal to the sum of 4,5 mln. Litas.

Usually SMEs may apply to the Municipal SMB Development Funds for the following support: to get loans on favourable conditions, to reimburse costs of participation in exhibitions, to get partial subsidy for the interest rate on loans, exemption of SMEs from taxes to the municipal budget, subsidies for consultancy and training of SMEs, direct financial support for the implementation of the means of the projects aimed at improving regulatory conditions favouring the growth of the SMEs sector.

Financial support offered by the Government and local authorities in accordance with the small and medium-size business development programs

• improvement of the economic and information environment for the small and medium-size business, and ensuring that business people in the regions have access to the information they need;
• consistent implementation of the EU Pre-accession program in the field of small and medium-size business and active participation in the EU multi-annual business development program;
• promotion of preparation and implementation of regional and target programs, development of small and medium-size business support infrastructure;
• development of financial assistance instruments to small and medium-size business.

The financial support from the funds of Special Program for the Implementation of the Small and Medium-size Business Development and Promotion Strategy is provided for:

• preparation of small and medium-size business development programs of municipalities in towns or regions and counties, as well as sectorial, regional, targeted business development programs. In numerous municipalities in towns or regions small and medium-size business development programs have been prepared and are under implementation;
• creation and implementation of the system of financial support for small and medium – sized business entities;
• reimbursement of costs of participation in EU Multiannual Program for Enterprise and Enterpreneurship and cofinancing of other international programs;
• subsidising of business information, consultancy and training services, and of other technical assistance measures;
• development of business infrastructure: subsidising of the costs of the creation, establishment and activity of business incubators and other institutions of business infrastructure aimed at reduction of costs of the services they provide;
• for the payment of a share of the SME loan interests.

The Special Programme is administered by the Ministry of Economy. Business Development Council is a collegial advisory body, that makes the proposals on the use of funds, allocated from the Special Programmes to an appropriation manager - the Minister of Economy. Business Development Council consists of 3 Committees: Export Promotion Committee, administering the Special Export Promotion Programme; Committee of the Promotion of Competitiveness administering the Special Programme of the Promotion of Competitiveness also the SME Development Committee administering the relating Special Programme.

The SME Development Committee is responsible for:

• evaluation of the draft programmes and laws, regulating SME and tourism development;
• approving the applications for financial support;
• considering proposals received from different business organisations regarding improvement of business environment.

Consultancy and training services provided on favourable terms in accordance with the business development programs

In 2001, Lithuanian Development Agency for Small and Medium-sized Enterprises (SMEDA) implemented the program: Subsidised Consultancy and Training Services to SMEs. Subsidised consultancy and training services to start ups and enterpreneurs were provided in six counties of Lithuania: Vilnius, Kaunas, Šiauliai, Panevėžys, Telšiai, Alytus counties. 250 thousand litas from the budget of SMEDA has been allocated for the implementation of the program. 1060 SMEs participated in this program. 864 hours of consultancy and 837 hours of training were provided to start ups. SMEs received 1029 hours of consultancy and 552 hours of training.

Services offered by business incubators, technological parks, business centres

The activities of business incubators and technology fleets provide an opportunity for SMEs to get free services on favourable conditions.

In Lithuania, 6 state supported business incubators operate, established using funds from the Small and Medium-Size Business Promotion Fund. Since 10 January 2001 their activities are subsidised from the funds of the Special Program for the Implementation of the Small and Medium-sized Business Development and Promotion Strategy. Partial financing was provided to the establishment and activities of the business incubators in Kaunas, Telšiai, Vilnius (Vilnija Business Incubator, Šiauliai, Alytus and Kazlų Rūda. 5 incubators of the established ones are production services incubators in Telšiai, Vilnius, Šiauliai, Alytus, Kazlų Rūda. In Kaunas a technological incubator was established. In the operating business incubators more than 7.400 m2 are adjusted for the activities of the incubated companies. At the end of the year 2000 there were 81 enterprise comprising more than 420 employees operating in business incubators. During the mentioned year 197 new working places were established. The incubated companies invested in business development over 1, 9 million litas and paid to the budget in the form of taxes over 2,6 million litas.

The main objective of the business incubator’s activities is to reduce the activity risk for the start-ups and operating enterprises, to assist the client companies to achieve the level they could engage self-dependently in commercial-economic activities and compete on the market. The business incubator leases premises and provides business management services (information, counselling, training, etc.) to the client companies on favourable terms and conditions, as well as intermediates the client companies in relations with Lithuanian and foreign financial donors regarding assistance to be provided, and with science and educational institutions regarding implementation of new technologies and scientific innovations in the business.

Business centres operate providing subsidized information, counselling and training services to the entrepreneurs on various business organisation and development issues, such as setting up a company, preparation of business plans, the labour law, marketing, financial accounting and book-keeping, taxes, etc. The main goal of these centres is to facilitate the establishment of new companies, to provide assistance to existing companies to develop their activities, to adapt themselves to the changing market conditions, to increase their competitiveness and efficiency, through providing information, counselling and training services. Currently, seven business centres operate in the following cities of Lithuania: Zarasai, Švenčionys, Jurbarkas, Akmenė, Skuodas, Šakiai, Kaišiadorys, Tauragė, Ignalina, Lazdijai, Šilutė. In addition, a specialized business center for the disabled people operates in Vilnius.

The goal of Euro Info Centres operating in Vilnius and Kaunas is to provide the SMEs with information and counselling services on issues related to the EU, to facilitate their adaptation to the rapidly changing market conditions in the context of Lithuania's integration into the EU. In the Euro Info Centres entrepreneurs shall receive answers to the questions what impact Lithuania's integration into the EU shall have on the business environment, what impact the euro introduction shall have on Lithuanian companies, where to search for business partners, what opportunities to obtain assistance from the EU funds exist. These centres may provide information on the EU enterprise policy, the EU directives regulating business, standards and certificates, the EU funds and programs available for the companies, information about conferences, exhibitions and fairs organised in Lithuania and the EU member or candidate countries. Euro Info Centres will also organize different seminars and trainings for entrepreneurs.

In Lithuania, technology parks operate too. The main goal of the technology parks is to develop relations between scientific research institutes and production or business companies for the implementation of the latest technologies, providing technological counselling, introduction of commercialisation of the scientific research output.

In Lithuania, the following state supported technological parks operate:

• The main activities of the Vilnius Scientific and Technological Park are as follows: organisation of production of new technologies, project preparation, production and expertise of prototypes, commercialisation of the research output. 35 specialised companies of technical profile perform within the framework of this Scientific and Technological Park(More than 250 employees work in these companies).
• The main activities of the Kaunas Scientific and Technological Park "NOVA" are carried out in the following areas: energy development (alternative energy using biomass and solid waste, gasification, production of electrical power); transport (production of bio-fuel), laser technologies, new materials, biotechnology, environment, new information technologies.

Skills improvement services offered on favourable terms under business development and employment programs

The Lithuanian Development Agency for Small and Medium Sized Enterprises has prepared the Regulation for the training (retraining) services to employees of enterprises on favourable conditions aiming at promotion of innovation activities of small and medium-size enterprises. According to the above Regulation, approved on 24th of June 1999 by the Business Development Council, costs of training (retraining) for employees of enterprises may be partially covered from the Special Program for the Implementation of the Small and Medium-Size Business Development and Promotion Strategy implementing the projects in the following areas:

• Acquisition of certificates for export products;
• Acquisition of certificates for management systems in the enterprise (ISO 9000);
• Implementation of new technologies (production restructurisation and rehabilitation projects);
• Implementation of information systems (computerised accounting, administration and production management systems);
• Marketing of new products (projects of market research, consumers’ survey, preparation of marketing strategy);
• EU or other international projects of implementation of innovations, small and medium-size business promotion projects.

Support to the establishment of new working places

By Resolution No. 529 of the 8th of May 2001, the Government of the Republic of Lithuania approved the Employment Improvement Program 2001 – 2004. This Program is the main document in which the specific support measures for the establishment of new working places in 2001 – 2004 are included.

Promotion of entrepreneurship – is one of the major directions of the Program aiming at reduction of the overall unemployment and promotion of the establishment of the new working places. Therefore in the Program it is envisaged to develop the institutional infrastructure of SME support, to improve business and investment climate in the country, to liberalise the functioning of the labour market.

The “Order of the Implementation of Local Employment Initiatives Projects” was approved by the Decree of the Minister of Social Security and Labour on the 24th of April 2002. Non – payable state grants governmental financial support will be provided for the implementation of the local employment initiative projects. Financial support constituting up to 40 minimal monthly salaries (at present this sum equals to 17.200 litas) may be provided for the creation of one working place. This year local employment initiative projects are being started to implement in the regions described by the highest unemployment rates, i.e.: N.Akmenė, Pasvalys, Druskininkai, Jurbarkas, Jonava, Joniškis, Skuodas, Mažeikiai, Kelmė, Šalčininkai, Lazdijai, Kalvarija, Vilnius region, Panavėžys region and Ignalina.

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