By | December 11, 2020

Activity of companies

Activity of companies

Based on EURO STAT statistics and classifications, the main sectors of activity of companies in the EU are as follows:
• Production
• Construction
• Retail and wholesale
• Accommodation / food
• Business services

Table – distribution of companies by economic sector in Albania

Agriculture, hunting, and forestry 4.0%
Mining 0.2%
Production 10.8%
Electricity, gas and water resources 0.6%
Construction 6.2%
Trade 35.0%
Transport and storage 8.4%
Accommodation and food industry 6.4%
Information and communication 2.1%
Other services 26.3%

The construction sector represents 11% of value-added for companies and 12 percent of the business workforce, although there has been a drastic decline during 2008-2013. The services sector has become a significant force in the global economy and represents the most dynamic international trade sector. Firms that provide public services such as energy, telecommunications, banking, consulting or engineering firms, or information technology firms have increased their investments in recent years.

Enterprises that provide services

Buckley, Pass, and Prescot (1992) note that the distinguishing characteristics of the services sector are: their inviolability, the inseparability of the separation of production from consumption, heterogeneity, and the fact that they are invisible. All these features contribute to the increase of these firms’ resource mobility and capacities, which make them more likely to be involved faster in international markets. On the other hand, one of the most critical issues in studies on service innovation is whether service innovation is different from enterprise innovation in the manufacturing sector.

Coombs and Miles (2000) have introduced three other schools of thought that articulate the key differences between them and that prevail in the service innovation sector and that they call: assimilation, demarcation, and synthesis.
The assimilation approach suggests no significant differences in innovation concepts between the services sector and the manufacturing sector. Thus, theories and concepts developed in the production context can be easily transferred to the services sector.

– Demarcation approach – defends the idea that the service sector’s distinctive features, such as their inviolability, co-creation with customers, heterogeneity, and invisibility, make it difficult to transfer knowledge from production to services.

– Synthesizing approach focuses on integrating concepts and theories related to innovation in both the service and manufacturing sectors.

Advantages and disadvantages of having a limited liability company

Limited liability companies possess some particular characteristics that make them have advantages and weaknesses in the market economy, requiring appropriate policies from government services and agencies. With the advent of new technologies and globalization, the importance of economies of scale based on economies of scale has declined, while the potential capacities of small businesses are growing. However, many of the weaknesses that small businesses commonly encounter, such as – lack of funding, difficulty in using technology (optimization), limited managerial skills, low productivity, legal constraints – all of these have generally been exacerbated in an environment dominated by globalism, dynamism, and technology.

Table no. Tax rates in the Balkan countries

Total tax rate (%) Ranking by the total tax rate (%)
Macedonia 12.9 3
Albania 36.5 66
Montenegro 21.6 18
Bosnia 23.3 22
Serbia 39.7 77
Slovenia 31.0 42

On the one hand, large companies are reducing commissions for many activities; on the other hand, companies’ defining role in the economy is growing. Moreover, the competition associated with these businesses’ emergence strongly influences productivity growth and economic growth. This process implies a range of jobs, and one of the critical aspects of the competition process is structural change. Less than half of new start-ups survive for more than 5 (five) years, and only a small number of them can become part of other powerful companies that are leaders in the field of innovation.

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