It is a pleasure to present to you another, elevent h edition of the Report on the Condition of the Small and Medium-Sized Enterprise Sector in Poland , prepared by Polish Agency for Enterprise Development.

The present edition of the Report was structured in to three main themes. The first part – Condition of the Small and Medium-Sized Enterprise Sector in Poland in 2005–2007 , similarly to the previous editions, presents the macroeconomic situation in P oland in 2007 as well as in-depth analyses concerning the condition of the SME sector at the n ational and regional level. This part of the Report is especially important as the data presented here are collected exclusively for the Report, therefore the thematic structure proposed, as well as the reg ional context and the scope of data prove the uniqueness of this position.

The two subsequent parts of the Report present the results of the research conducted by PAED in 2007–2008. Research constitutes a significant part of PAED’s scope of activity. It results mainly from the statutory obligations laid upon the Agency, whi ch include, inter alia researching the role of the SME sector in Polish economy as well as collecting and publicising the relevant information. Moreover, the results of PAED’s research activity h ave a vital application function, as the informatio n collected constitute the basis for designing new or adjusting the existing support instruments.

The second part of the Report, The factors of development and competitiveness of e nterprises , presents the results of two research projects commi ssioned by PAED in 2008, the objective of which was an in-depth analysis of the factors conditionin g the competitiveness of Polish enterprises and the development potential of the sector. Highly diversi fied internal and external factors affecting the market position of enterprises were the subjects of the research. This part of the Report is concluded in the chapter devoted to PAED’s activity, mainly i n the area of support co-financed from the EU funds, due to which there is a more and more visibl e change in the structure of enterprises’ financing, which is indicated by the results of PAE D’s research.

The third part of the Report, Research on the Innovations in Enterprises , presents the results of three research projects, analysing the determinants enhan cing the innovation processes in enterprises. The research on innovations play a very important role in PAED activities in recent years. Polish entrepreneurs, not fully aware of the role and sign ificance of innovation processes in the global economy, definitely need the educational and financ ial support in this area. The results of research presented indicate not only innovation gaps, but al so good practices, in the activity of enterprises, business environment and scientific circles, and th e recommendations presented may be of help for various groups of stakeholders, including public in stitutions shaping and implementing the policy towards the SME sector.

In conclusion, we would like to express our gratitu de for any suggestions or comments, which we always regard as valuable source of inspiration for our work on subsequent editions of the Report.