The Important Role of Corporates in the Economic and Social Development of a Country
By Adrian CIVICI
Albanian Daily News
Published July 11, 2018
The debates and discussions on the problematic and the potential of economic development in Albania seem tightly connected to three essential elements: the increase of direct foreign investments; investments in activities and high technology and innovation branches; and investment to modern digital methodologies of marketing and management.
By Looking carefully to the structure of the sectors that contribute in the the GDP, and above all, analyzing the dynamics and quality of the economic growth in Albania, we notice some indicators that deserve specific analysis and considerations.
Firstly, Albania has an economic structure dominated almost entirely by the micro and small businesses, while the big and medium sized businesses are in lower percentage. This kind of structure, beside the interest in self-employment and to a certain point a kind of social serenity, is inhibitory or to say at least not very attractive to big foreign investments, bank's crediting for development, to the deployment of new techniques and innovative technologies etc. This feature mostly nurtures informality.
Secondly, it is the service sector that has the biggest impact in the GDP, followed by the agriculture, tourism, transportation and the industry. In concrete figures, one can have the impression that the domination of the service sector tells us a lot about an adequate and economic structure in trend with the economies in the developed or rapidly developing countries. But analyzing the "structure" and the contribution of the services, we notice immediately that we are dealing with a low efficiency sector, modest investments, and relatively lower salaries, with modernization dynamic and slow innovation.
Thirdly, the labor market in Albania seems unbalanced, reflecting thus a supply-demand inconsistency, mainly as a result of the instability of a large group of businesses, in their activities characterized by a fluctuation in the demand for new employments or the shortcomings of the "demand for employment" as a result of the lack of the proper professional skills.
In the fourth place, the level of the economic liberalization and international cooperation of the most part of the Albanian businesses is still very low, which implies that these businesses that operate in limited sectors and territories have little or not at all stable connections with the analog businesses in the region and beyond in Europe or world. This situation limits the improvement in services or products of some of these businesses, as well as in the insertion of modern techniques of management and guiding, in the expansion of modern technologies and innovations.
There are many analyses and reflections on this matter and each decision maker, researcher or manager has his own analyses and reflections from different point of views and concerning different problems. But it seems that, when it comes to the conclusion, everyone thinks the same: that the Albanian economy needs to be restructured in the name of the expansion of the quantity and importance of the medium sized, big businesses and especially, of the corporates, being them Albanian or international.
Increasing their importance in the Albanian economy, especially of the big businesses and corporates, the economy becomes more stable, the big investments are more likely to happen, the international corporates are more likely to be present, the employment is more stable and dynamic, the inclusion of new innovative products and services more likely to be faster, the rise of the incomes and salaries more likely to be more evident, the reduction of the informality is faster and more successful.
The experience of many countries like Albania is in composition and the implementation of specific priority policies such as "the pro-business policies", whose main purpose is to reconstruct the economy, financing and employment sector, by stimulating and encouraging thus the new big businesses and corporates in the most important sectors of the economy, especially in the energy sector, telecommunications, sustainable development, tourism, manufacture industry, high technology products etc.
Good example in this model are former socialist countries such as Slovakia, Slovenia, Hungary, Czech Republic, Estonia, Latvia, Poland, Serbia, FYROM etc., which have drafted and are implementing very aggressive policies, especially juridical and fiscal ones, in order to absorb foreign investments and to attract in their territory big companies and corporations, hoping to improve thus their economies and social development.
In a small country with a modest economy like Albania, even a limited number of big companies and corporates, spread proportionally in the key sectors of the economy, and have an incredible quantitative and qualitative impact in its economic growth and sustainability. A few concrete examples would be enough to materialize this fact.
Vodafone Albania, one of the biggest foreign investors which continue to offer a great contribution in the Albanian economy, is one of the most positive examples and one of the success stories in Albania.
Nowadays, around 1, 4 million of Albanians have trusted their communication needs to Vodafone, the company which is perceived easily by anyone as pioneer of latest innovation and technologies in the country. The first to introduce 3G Technology in 2011, followed by 4G and 4G+ (LTE) in 2015, Vodafone has recently introduced in a special event in Tirana, a new portfolio of products & services enabled by Internet of Things. Internet of Things is the technology that is revolutionizing the world and directly influencing the economic growth in developed countries where it is applied, thanks to various facilitations and solutions in sectors such as Agriculture, Health, Infrastructure, Transportation, Energy etc
Since its establishment in Albania, Vodafone has invested over 1.415 million Euros in the Albanian market mostly dedicated to: improving the network infrastructure, spectrum licenses, regulatory fees, distribution channels, direct and indirect employment, etc. In 2017, Vodafone Albania has invested 70 million Euro, while in 2018, the investments rate is predicted to be 85 million Euro. Meanwhile, investments for the next 5 years is predicted to be around 375 million Euros, while it is considering to expand its activity also in the fixed telephony market, with an initial investment value of about 50 million euros.
Furthermore, Vodafone Albania is one of the biggest taxpayers in the country. Since 2001, Vodafone has contributed to the state budget with 208 million Euros of taxes, which is further used by governments for investments in infrastructure, education, health, etc. Only in 2017, Vodafone has contributed to the state budget more than 14.5 million Euros of taxes.
Employment is another important contribution. The development and youth employment is one of the main Vodafone commitments not only in employing a considerable number of people, but it has also helped in enhancing employment in other businesses. Vodafone Albania has created 1000 jobs in the country, directly or indirectly employed by Vodafone. Thanks to special programs for young graduated people, Vodafone continuously offers trainings, internships and other job opportunities. Only through "Graduate Program", Vodafone has recruited more than 64 young graduates, 37 of whom still work for Vodafone and some of them lead successful careers in Vodafone's branches around the world.
Vodafone has continuously invested in local competition as well as in other sectors in the region, in new technologies and network infrastructure. Thus, Albania is one of the crucial markets in terms of excellent mobile network performance. According to the latest report by Ookla, the world's giant company on internet performance evaluation, Albania ranks 25th among 130 countries around the world in terms of internet speed, by leaving behind many developed countries. According to the International Telecommunication Organization, Albania is one of the world's most advanced mobile markets.
Such success is not only the success of a company, but a success for all the country, which thanks to the contribution of companies of Vodafone standard, we get closer to European countries standards, so much admired by our nation.