The Baseline assessment report for Economic Region South (ERS) covers six sectors considered to have significant competitive advantage and higher potential to improve Kosovo’s balance of trade in goods and services.  It identifies challenges faced by Small and Medium Enterprises (SME’s) of ERS operating in agriculture, food processing, construction materials, wood processing, artisanal crafts and tourism in having better access to market and information necessary for increasing their domestic and export competitiveness. Moreover, it provides a comprehensive assessment of the current situation (nature and scope of operations) and defines the factors influencing the competitiveness of businesses operating in the region. In general, the report reveals that besides some differences in few aspects, businesses operating in different sectors share the same challenges.