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Small and medium-sized enterprises (SMEs)

SME Performance Review

The SME Performance Review is one of the main tools the European Commission uses to monitor and assess countries' progress in implementing the Small Business Act (SBA) on a yearly basis. With an emphasis on the measures from the SBA Action Plan, the review brings comprehensive information on the performance of SMEs in EU Member States and other 9 partner countries. It consists of two parts – Annual Report on European SMEs and SBA country fact sheets.

Brussels, 3 October 2014 - The European Commission published today the 2013/2014 Annual Report on European SMEs. The report, prepared on a yearly basis, provides an overview of the size, structure and importance of SMEs to the European economy and their contribution to growth and jobs, as emphasised in the Small Business Act and Europe 2020 strategy. Comparisons with important partner countries outside the EU and with the large enterprise sector are also included.

Annual Report on European SMEs

2014 report on European SME

There can be no doubt that SMEs have had to navigate a difficult economic terrain in recent years. This Annual Report on the economic performance of European SMEs is a testament to those challenges – but also a window to the progress achieved by businesses across the EU28 in spite of these challenging economic conditions.

 

 

 

 

 

Reports are available here:

  • Annual report: 2014 pdf - 3 MB [3 MB] 2013 pdf - 12 MB [12 MB] 2012 pdf - 3 MB [3 MB]
  • Database for the Annual report: 2014 zip - 20 MB [20 MB]
  • Forecast methodology: 2014 pdf - 325 KB [325 KB]

The pace of recovery of SMEs has slowed in the last three years. While there are some reasons for cautious optimism, conditions remain extremely tough for SMEs and further support is needed to yield sustainable SME growth. The recovery is still both partial and fragile.

At the EU level, by 2013, SMEs had recovered to pre-crisis levels only in terms of value added, while employment in 2013 was still 2.6% below levels registered in 2008. In 2013, for SMEs in the non-financial business sector, value added increased by 1,1%, while employment decreased by 0,5% and the number of enterprises decreased by 0,9%.

Recovery of EU28 SMEs in 2013 relative to 2008 (% change)Number of SMEs, value added generated and persons employed by SMEs -EU28, 2008 to 2013

The overall picture, however, does not portray the considerable variations among size classes, sectors and Member States. The Annual Report reviews these differences in detail.

The outlook is somewhat positive and a strengthened recovery is on the horizon. Total value added generated by SMEs is forecasted to rise by 2.8% in 2014 and 3.4% in 2015. Employment in SMEs is also forecasted to rise, with another 740,000 jobs.

SBA fact sheets

The SBA fact sheets assess the progress in the implementation of the Small Business Act at national level. The fact sheets focus on indicators and national policy developments equivalent to the SBA's 10 policy dimensions in the 28 EU Member States, Albania, FYROM, Iceland, Israel, Liechtenstein, Norway, Montenegro, Serbia and Turkey.

Please note that the SBA fact sheets:

  • do not constitute a comprehensive assessment of Member States' policies but only one input for it
  • should be regarded as a supplement to, and not a substitute for, any other relevant in-depth studies of SME policies

Database of SBA policy measures: Download the database of SBA policy measures: 2014 (Access) zip - 532 KB [532 KB]

Methodology: 2013 pdf - 2 MB [2 MB]

 

>>> See also country sheets for Israel, Liechtenstein and Malta

>>> Click here to see the full country list

Albania, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Former Yugoslav Republic of Macedonia, Germany, Greece, Hungary, Iceland, Ireland, State of Israel, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovak Republic, Slovenia, Spain, Sweden, Turkey, United Kingdom

Albania

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro73,748130,9290,65
Small2,83955,3070,79
Medium-sized50347,6770,51
TOTAL SMEs77,090233,9131,95

Small and medium-sized enterprises (SMEs) are very important for the Albanian business economy, accounting for 81 % (EU average: 67 %) of employment and generating about 70 % (EU average: 58 %) of added value. Microfirms are particularly prevalent among SMEs dominate three sectors in terms of added value and employment: accommodation, wholesale and retail trade and construction. The crisis did not affect the Albanian economy as much as that of some EU countries, but the country did experience a slowdown in economic growth and the unemployment rate remained at around 13 %. Low consumer confidence and tight financial conditions curbed consumption expenditure. Albania’s Single Business Act (SBA) profile was below the EU average in 2013, with certain disparities across principles. The country lags behind the EU average in responsive administration, internationalisation and the environment and performs comparatively better in access to finance. In 2013 and the first quarter of 2014, it made some progress in implementing SME policy by putting in place or announcing 46 policy measures addressing all of the SBA policy areas. This brings it more into line with EU standards and practices. Nonetheless, Albania needs to continue to improve the business environment by moving towards the introduction of a full regulatory impact assessment system for all legislation that directly affects business operations.

Austria

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro269,497670,76831
Small32.818631,06033
Medium-sized5,015505,72839
TOTAL SMEs307,3301.807,556103

Austria´s SME sector has kept on growing throughout the crisis. After a small dip in 2009, the number of firms expanded by an additional 19 000 to more than 307 000 in 2013. The newly-created firms (together with established businesses) created almost 90 000 additional jobs, a net increase of more than 5 % over the years 2009-2013. Simultaneously, value added grew by more than 17 %. Medium-sized firms (50-249 employees) showed the highest growth rate in terms of value added (25 %), significantly higher than the respective growth rates in micro-firms (15 %) and small companies (11 %). Medium-sized firms performed well partly because of a rise in exports in recent years. Interestingly, employment in micro firms went up by 5.4 %, and in small ones by 4.7 %, while medium-sized firms added 5.2 %. The steady expansion spread across all sectors, with services at the forefront. Austria features one of the most competitive Small Business Act (SBA) profiles in the EU. This year, it outperformed the EU average on no less than six scoreboards. These include second chance, single market, access to finance, skills and innovation, environment and internationalisation. Results for many indicators do show improvements over the past six years. Responsive administration is the only category in which Austria is below the EU average. Problematic areas are confined to some specific, narrow issues, such as high minimum paid-in capital requirements. Many of these are already being addressed. In five areas, conditions have been improving consistently since 2008, with no backsliding in any category. However, a lack of skilled personnel in some industries, especially IT personnel, is an increasing problem for many SMEs. Given that federal elections took place in 2013, there has been a pause in SME policy making, so there has been only slight progress in launching new measures over the reference period. Altogether, Austria implemented 12 new measures addressing six out of the 10 SBA policy areas in 2013. Preliminary forecasts for 2014-15 see the number of SMEs in Austria rising by further 6 000 (+2.1 %), with an estimated net increase in jobs of 17 500 (+1 %).

Belgium

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro489,410842,45044
Small27,082522,69336
Medium-sized4,204405,23734
TOTAL SMEs520,6961,770,380115

In 2013, the Belgian economy continued to recover from the 2008 economic crisis and has now slightly surpassed its pre-crisis level of real GDP. In line with this resurgence, recent estimated data show a significant increase in the number of SMEs and in their employment and added value. However the labour market situation is unlikely to improve in the immediate future. This is because businesses will restore their level of productivity before recruiting new staff. As a result, the unemployment rate has reached 8.5 % — higher than it was during the 2008–09 period — and is expected to continue to increase in 2014. Against this background, Belgium’s SBA profile is largely in line with the average of its counterparts. While skills and innovation remain the strength of Belgian SMEs and further measures have been put in place in order to provide entrepreneurs with a second chance, more targeted measures are needed in other areas. Even though public authorities have taken many measures since the SBA came into force, entrepreneurship and internationalisation can be improved further with even more coordinated actions with a wider impact. As was the case almost everywhere else in Europe, it was harder for Belgian SMEs than for larger businesses to get loans and Belgian stakeholders consider production and labour costs (two items which are not covered by the SBA), the regulatory burden and the costs of international trade to be the main problems.

Bulgaria

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro275,908560,6603
Small22,194441,8674
Medium-sized4,091402,9544
TOTAL SMEs302,1931,405,48111

Like that of other EU countries, Bulgaria’s business economy is dominated by small and medium-sized enterprises (SMEs), which account for 76 % of employment and 61 % of value added. Most Bulgarian SMEs are active in the wholesale and retail trade sector, which accounts for almost half of Bulgarian SMEs. The economic crisis hit the economy hard, resulting in a decline in real gross domestic product (GDP) of 5.5 % between 2008 and 2009. Despite a weak recovery in subsequent years, driven by external demand, in 2013 real GDP was still 2 % below its pre-crisis level. From 2008 to 2013, employment fell in both SMEs and large companies, although to a greater degree in the latter group: SMEs lost about 8 % of their workforce, large firms lost about 16 %. At the same time, value added by SMEs declined by 4 %, whereas in large firms it grew by about 8 %. This diverging trend can be explained by the fact that the economic crisis has put strong pressure on firms to improve productivity and to diversify their markets, and SMEs were slower to adapt than larger firms. In 2013, Bulgaria’s SBA profile can be described as ‘catching up’: most areas score below or close to the EU average but have made progress in recent years. It improved most in terms of responsive administration, ‘think small first’ and access to finance. Moreover, commercial law was amended to provide a consistent legal framework for tackling arrears in payment and pursing debtors, while the government took urgent action to pay the public administration’s debts to the private sector. Other significant measures improving the SME environment and access to finance were announced and some were quickly implemented. However, there was a lack of consistent policy action on improving skills and innovation, and on simplifying the insolvency framework.

Croatia

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro134,091302,7953
Small10,091193,4493
Medium-sized1,722180,2394
TOTAL SMEs145,904676,48310

Croatia’s economy continued to suffer from the economic crisis in 2013, with GDP decreasing further for the fifth year in a row. Employment and added value in the SME sector also decreased. Croatia’s joining the EU significantly changed its international trade pattern. It left the Central European Free Trade Agreement to become part of the single market. Croatia’s joining the EU also means that the government needs to upgrade its SME policy by taking EU standards as its benchmark. Croatia’s 2013 SBA profile shows below-average performance in most areas. Its main priority should be improving the business environment by tackling administrative and judicial weaknesses. Cumbersome framework conditions for entrepreneurial activity and the lack of stability and predictability of the legislative framework make it difficult to do business in Croatia. The SME test needs to be done for all upcoming legislative changes. Cumbersome administrative procedures need to be simplified. The SME development strategy for the period 2013–20 has been adopted. Its priorities reflect the EU’s SME policy priority areas (SBA priorities). It has not yet been translated into policy measures however.

Cyprus

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro37,63778,3992
Small2,72650,4172
Medium-sized43941,6732
TOTAL SMEs40,802170,4896

The immediate effect of two successive financial crises and the measures put in place to stabilise the situation was to aggravate the recession. During the 2013 recession, negative growth rates were recorded mainly in the construction, manufacturing, banking, transport, trade and other service sectors. Unemployment, which had reached 16 % by the end of 2013, is expected to continue to increase (compared to 7.9 % in 2011 and 11.8 % in 2012). The increase in unemployment was accompanied by severe losses of disposable income and a sharp decline in the spending power of the unemployed. This led to a drastic decrease in the volume of business of local SMEs. The contraction of real GDP increased to 6 % in 2013. The primary concern of local SMEs was therefore to survive during 2013. The situation of SMEs in the business economy reflects these macroeconomic developments. Employment in SMEs (-7 %) and their added value (-9 %) decreased significantly, bringing SMEs’ overall losses in employment and added value between 2010 and 2013 to -13 % and -14 % respectively. As a result of what happened last year, many local SMEs in the construction and retail sectors closed down or saw their volume of business drastically decrease. On top of job losses of 29 %, SMEs in construction continued to accumulate losses, amounting to an overall 59 % decline in added value between 2010 and 2013.In these difficult circumstances, the government tried mostly to take measures to help local SMEs survive and foster a competitive business environment. Some measures announced in previous years were further delayed to give way to higher priorities. As a result, most of the measures implemented in 2013 focused on helping SMEs access external financing, grants or bank guarantees. Improvements were made in the area of responsive administration and reducing red tape. No real progress was made in other problematic SBA areas, such as the environment, state aid and public procurement.

Czech Republic

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro968,9981,132,76916
Small31,850637,86512
Medium-sized6,273654,05616
TOTAL SMEs1,007,1212,424,69045

Recent Czech SME policy has been pragmatic and selective, with strong emphasis on developing skills and innovation and strengthening public procurement. The former is expected to boost the country’s long-term competitiveness, while the latter clearly targets low-hanging fruit, facilitating the absorption of EU funds. Furthermore, new initiatives to improve access to finance were in preparation, clearly responding to the most pressing needs businesses now have. However, there exist a number of SME policy areas where action is needed and where Czech performance fails to keep up with the European average. Although this mainly concerns responsive administration and internationalisation, all other areas showed roughly average performance in 2013. This partly explains why the performance of Czech SMEs remained weak. SMEs’ value added in 2013 was almost 11 % lower than in 2008. Microenterprises were more common, but significantly less productive, than in the EU on average. Overall, the Czech Republic’s SBA profile combines some strong points with significant weaknesses. It is becoming clear that even average-performing areas now require at least some maintenance work to keep up with the improving EU average.

Denmark

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro191,097348,87933
Small18,569376,07723
Medium-sized3,201320,11524
TOTAL SMEs212,8671.045,07179

The contribution of SMEs to the Danish business economy is slightly higher than the EU average in terms of value added (63.5 % versus 58 %), and slightly lower in terms of employment (65.5 % compared with 66.9 %). This indicates a higher-than-average labour productivity that is driven in particular by micro firms. The Danish economy was hit hard by the economic and financial crisis, losing 5.7 % of real GDP from 2008 to 2009. The subsequent recovery again turned negative in 2012, but economic growth returned in the last half of 2013. The positive tendency and the growth in value added are expected to strengthen, driven by a rise in domestic demand and exports (mainly to Germany). At the same time, employment is still sluggish and both large and small businesses currently employ about 10 % fewer employees than they did in 2008. This is partly the result of a shift in the strategies of companies after the crisis, when they focused more on reducing costs, increasing productivity and outsourcing secondary activities. This resulted in a disconnect between the trend in turnover (growth) and the trend in employment (stagnation). Denmark has a very positive SBA profile and continues to offer a friendly business environment, coupled with a well-functioning and transparent institutional system and a public administration responsive to the needs of SMEs. The country’s particular strengths are a sophisticated business sector that is highly innovative and competitive on international markets.

Estonia

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro54,572123,8092
Small4,82497,7862
Medium-sized98295,0773
TOTAL SMEs60,378316,6727

Small and medium-sized enterprises (SMEs) are very important for the Estonian business economy, accounting for about 74 % of value added and 78 % of private sector employment. Most Estonian SMEs are active in the service sectors, followed by the retail and wholesale trade and construction. The manufacturing sector is also important, as it accounts for a quarter of SME value added and employment. Estonia was hit particularly hard by the economic and financial crisis. Real GDP dropped by 14.1 % in just one year, a contraction which was the result, on the one hand, of the deflation of the housing bubble and, on the other hand, of the virtual disappearance of export markets on which its economy was dependent. Nevertheless, Estonia was quick to recover and to strengthen its economy by making it more resistant to external shocks. Real GDP grew by 17.6 % between 2009 and 2013, regaining its pre-crisis level, due to a rapid rise in high value added exports by manufacturing firms. At the same time, the situation is less positive in terms of the number of people employed, which, for SMEs, in 2013, was still 8 percentage points below its 2008 level. This should be seen in the context of the unsustainable employment growth that took place in the construction and retail trade sectors as a result of the credit bubble in the boom years preceding the crisis. Estonian SMEs benefit from a business-friendly environment and a strong and responsive administration, coupled with a sophisticated business culture and good framework conditions for innovation and internationalisation. At the same time, Estonia lags behind other EU countries in environment indicators and offers a less efficient insolvency framework. In addition, the generally recognised weaknesses of Estonian SMEs are their lack of qualified staff and engineers and their limited access to venture capital and other less traditional sources of financing.

Finland

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro204,307345,05418
Small15,145294,87717
Medium-sized2,580250,32316
TOTAL SMEs222,032890,25451

Finland’s SMEs have been slow to recover from the 2008 crisis, in particular in employment terms. While for value added, Finland´s SMEs have recovered well from the initial shock, and have even managed to expand their businesses to above pre-crisis levels, the number of SMEs and SME employment have still to return to 2008 levels. In 2013 there were 550 SMEs less than in 2008 (-0.2 %), and the number of employees in Finnish SMEs fell by almost 19 000 (-2.1 %) to 890 254 between 2008 and 2013. Microenterprises were particularly hard hit and most struggled to bounce back from the initial shock. However, large enterprises fared even worse than micro-firms. They shed more than 31 000 jobs, representing a 6 % decline in their work force compared to 2009. Policy-wise, Finland´s SBA profile continues to be one of the strongest of all the EU-28 Member States. In seven SBA areas, the country is performing above the EU average. Finland performs in line with the EU average in two areas — state aid and public procurement, and environment. The country trails its EU peers in only one SBA policy area — single market. Another feature of Finland´s performance is a high level of stagnation. Over the past six years, with the exception of responsive administration and skills and innovation, most SBA areas did not see any improvements. In fact, Finland´s performance deteriorated, at least in relative terms, in areas such as access to finance, and state aid and public procurement. In 2013, Finland announced and implemented a very limited number of SBA-related policy measures — six in all — covering five of the ten SBA principle policy areas. Overall, progress in implementing the SBA has been moderate in the past year. The areas that saw most progress in 2013 were access to finance and internationalisation. In terms of financing, a new ‘growth-financing programme’ was introduced to improve the availability of funding for growth companies. As regards future challenges, apart from the need to intervene in specific areas such as access to finance, public procurement and internationalisation, SME policies and actors need to be better coordinated across all policy fields. For the time being, the job-less recovery of the Finnish SME sector is forecast to continue until 2015 at least. While value added is expected to grow in 2013-15 by 3.8 %, the number of SMEs is expected to fall by some 1 200 to less than 221 000 (-0.5 %). SME employment is forecast to decrease by around 10 000 to almost 880 000 (-1.2 %) with the bulk of losses shifting from microenterprises to small-sized businesses.

France

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro2,439,9194,374,942253
Small136,3642,915,947148
Medium-sized21,7402,295,614133
TOTAL SMEs2,598,0239,586,503534

The French business economy includes a significant number of SMEs, which together account for 59 % of value and 63 % of employment. Microenterprises are comparatively more prevalent, making up 94 % of all businesses. Most French SMEs are active in services (45 %), the wholesale and retail trade (26 %) and construction (19 %).The SME sector in France was hit hard by the global recession in 2008-09 but experienced a quick recovery in 2010-11, followed by some ups and downs since then. Nevertheless, in 2013 the French economy seemed to have recovered to its pre-crisis level. SMEs in real estate, accommodation and food services performed particularly well, while those in the construction sector are trailing significantly behind. French SMEs continue to benefit from good framework conditions for trade, an administration that is becoming more responsive to the needs of small businesses, and good access to state aid and public procurement opportunities. Nevertheless, the country’s overall performance on the SBA grid continues to be hampered by below-average results when it comes to seizing the opportunities of the internal market and by a somewhat weaker culture of entrepreneurship.

Former Yugoslav Republic of Macedonia

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro48,580111,2880,79
Small3,93773,2520,69
Medium-sized70770,6230,61
TOTAL SMEs53,224255,1632,09

Overall, the former Yugoslav Republic of Macedonia´s SBA profile is somewhat mixed. In three policy areas, entrepreneurship, responsive administration and access to finance, the country scores above the EU average, while in three others, skills & innovation, environment and internationalisation, its results are rather poor. There is a clear trend of improvement over time, especially on skills & innovation and, to a lesser extent, responsive administration. The overall assessment of SBA implementation shows several significant new measures (announced or actually adopted) but modest outcomes as a result of the deep recession in the country and slow adoption of SBA-related practices on the public administration side. The former Yugoslav Republic of Macedonia offers great potential for additional growth in the future, with the fourth lowest public debt ratio in Europe (33.8 %), annual inflation of 2.8 % in 2013, a budget deficit of just 3.9 % in 2012 and, according to the IMF, a firm business-friendly vision on the part of the government. In 2014, the economy is expected to continue its recovery, which should be primarily driven by a continuous strong rise in investment and an increase in exports.

Germany

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro1,809,0294,974,919219
Small336,1116,300,111275
Medium-sized56,0045,445,644298
TOTAL SMEs2,201,14416,720,674792

The performance of German SMEs since 2008 has been exceptional. Compared to most other Member States, they expanded throughout the crisis. Between 2009 and 2013 alone more than 160 000 additional SMEs were set up. During the same period, the number of jobs created in SMEs increased by more than 1.5 million to more than 16.7 million in 2013. Forecasts see this trend continuing until 2015 at least, thanks to a very favourable overall business environment. This is reflected in Germany´s SBA profile, with the country well above the EU average in many of the main SBA areas relevant to the EU. Skills, innovation and the environment are its strongest areas. It outperforms its EU peers in access to finance, state aid and public procurement and second chance. If there is any weakness, it is entrepreneurship. The level of entrepreneurial activity remains relatively low and the number of new start-ups is falling. This is partly the flip side of the country’s overall economic success. Existing businesses can offer young, well qualified would-be entrepreneurs excellent employment conditions and career opportunities, making it risky and therefore less attractive to be self-employed. The low level of entrepreneurial and start-up activity is also a sign that Germany’s population is ageing faster than that of many other Member States. Moreover, the overall very good conditions for businesses in Germany are marked by a certain dichotomy. It is particularly existing firms which benefit from them. When it comes to the conditions offered to start-ups, Germany is much less ahead in comparison to many of her EU-peers. This refers in particular to the access to finance but also to start-up procedures. While the current economic and labour market situation seems to lessen the need to actively expand the entrepreneurial base, improving current conditions for start-ups is the key to ensuring that the situation remains positive in the long term. However, this should not take away from the overall outstanding performance of German SMEs throughout the crisis and the very positive business environment.

Greece

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro629,8111,130,79416
Small21,669398,50311
Medium-sized2,464227,8328
TOTAL SMEs653,9441,757,12934

With real GDP in 2013 estimated to be almost 23 % below its 2008 level, Greek SMEs have borne the brunt of the economic crisis in recent years. In that period, SME employment fell by 27 % or 638 467. Almost one in four of the SMEs that existed in 2008 closed down, reducing the total volume of SME added value to less than a third of its 2008 levels. While the downward trend slowed down in 2013, it has not been fully reversed yet. In these difficult circumstances, Greece´s SBA policy profile remains weak. There is not a single area in which its performance is better than the EU average. It lags very much behind this average in three areas — second chance, access to finance and internationalisation. As was the case last year, there is the biggest gap between Greece and its EU counterparts in terms of access to finance. On a positive note, many indicators for the SME environment across the various SBA principle areas are improving. As a result, most areas improved between 2008 and 2013. Greece is in its sixth year of recession and the government has changed three times since 2009. In this fragile environment, it was very hard to implement policy. This situation was aggravated by many other factors including the overall economic and political stability of the country. Still, it has made a lot of progress in implementing the SBA since 2008. In 2013, this was especially the case in terms of access to finance, skills and innovation, the business environment, internationalisation and promoting entrepreneurship. For the future, efforts to improve access to finance, encourage innovation and skills acquisition and promote internationalisation must be redoubled. While responsive administration reforms are beginning to bear results, the dire state of public finances is negatively affecting SMEs. For example, as a result of the economic crisis, public authorities take almost twice as much time as before to pay their providers of works and services. Only very recently has the situation started to improve. This calls for a reinforcement of the ‘think small first’ principle, e.g. by improving policy coordination among the different branches of government to ensure that the interests of SMEs are given due consideration in all relevant policy actions. The preliminary outlook for the years 2014 and 2015 does not show a major reversal of SME trends. Total SME employment is expected to fall by another 106 000, the number of SMEs may drop by another 40 000 and the forecasts are similar for the added value of SMEs. However, the combined effect of the impact of the reforms taking place and the recent more positive macroeconomic trends may result in a better situation than current forecasts suggest.

Hungary

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro497,947867,3169
Small23,906447,9328
Medium-sized4,064404,3749
TOTAL SMEs525,9171,719,62225

Until 2013, the Hungarian SME sector did not manage to fully recover from the initial shock of the crisis in 2008 and has been sluggish since 2009. Since then, it has fluctuated at around 90 % of 2008 levels for all main aggregates: number of SMEs, employment and value added. The number of SMEs in the business economy dropped by 4 % between 2009 and 2013 with a net loss of more than 22 000 SMEs. This decline in the number of firms also resulted in a loss of jobs. On a net basis, SMEs shed some 32 500 jobs between 2009 and 2013, a decrease of 2 %, and gross value added shrank by as much as 6 % in the same period. The crisis affected SMEs much more than large companies. There has been little change in Hungary´s SBA profile as compared with last year. Problematic areas are entrepreneurship, second chance, skills and innovation, environment and internationalisation; for all of these, Hungary scores below the EU average. For single market, access to finance and responsive administration, Hungary performs in line with the average, and for state aid and public procurement, it even scores above it. While the overall profile as such has not improved much as compared with last year, the data suggests real progress over the past six years in about half of the SBA principle areas. Against this background, Hungary has made continuous efforts in recent years to improve its business environment. The areas that saw most policy activity and the greatest number of new measures over the period 2013-14 were entrepreneurship and responsive administration. However, the revised public procurement law and the new ‘Strategy for Small and Medium Enterprises from 2014 to 2020’ are also noteworthy. As for the future outlook, the growth potential of the Hungarian economy is expected to improve, but only moderately. To a large extent, this is due to a business environment characterised by high administrative burdens, regulatory volatility, and limited competition in major non-tradable sectors. Saddled with these structural challenges, the Hungarian SME sector is not expected to experience substantial growth for another two years. Value added is forecast to remain at 2013 levels until 2015, and expectations are that the number of SMEs will decrease by 1 %, and SME employment by almost 2 %, or more than 5 300 jobs. On the upside, micro firms are expected to fare better than small and medium-sized firms.

Iceland

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro24,24826,3211,7
Small1,29525,1591,3
Medium-sized21320,2191,0
TOTAL SMEs25,75671,6993,9

Since 2011 the Icelandic economy has been steadily recovering following the dramatic collapse in 2009 and 2010. In 2013 GDP rose by 3.3%. Business demography also reflected positive developments with the number of business registrations increasing by 10.6% (rising from 1,752 to 1,938) and insolvencies decreasing by 17.4% (from 1.112 to 918). The outlook for the future is positive. Tourism is now Iceland's most important export sector, followed by the fishing industry. Iceland´s SBA profile displays a very strong performance in most available categories. The country scores above the EU average in five areas: entrepreneurship, second chance, responsive administration, access to finance, and skills & innovation. Environment and internationalization are the only fields in which the country trails the EU average. In 2013, Iceland announced and for a good part adopted/implemented 7 new policy measures addressing 6 out of the 10 policy areas under the Small Business Act, aimed at achieving the goals of the Iceland 2020 strategy and the Science and Technology Council strategy. Both these policy plans have recently been revised by a newly elected government and are yet to be fully implemented.

Ireland

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro128,363281,81413
Small13,595263,91413
Medium-sized2,416216,33017
TOTAL SMEs144,374762,05843

The Irish economy is dominated by small and medium-sized enterprises and has proportionally fewer micro-firms than the EU, on average (88 %; EU average: 92 %). SMEs in Ireland account for a significant share of private sector employment (70 %; EU average: 67 %). Their share of value added (48 %) was lower than the EU (58 %). The economy has not yet recovered fully from the 2008/2009 crisis, but since 2011 there have been positive signs of growth. SMEs’ high dependence on domestic demand has made them very vulnerable, and in 2008-13 they underperformed large enterprises. Thus, in 2008 and 2009, SME’s value added dropped by 12 % and 13 % respectively, followed by a recovery of 10 % from 2010 to 2013. By contrast, large firms’ value added contracted by only 2 % between 2008 and 2009, and grew by 4 % in 2009 and 10 % from 2010 to 2013. Given this background, the overall economic situation for Irish SMEs in 2013 is one of continued fragility accompanied by relatively modest growth and performance. Ireland has a very positive SBA profile, with all but one SBA principle scoring above the average. It offers a friendly business environment, supported by an efficient administration, responsive to the needs of businesses, and an innovative and entrepreneurial business culture. To further improve its SME profile, Ireland will need to expand access to finance for SMEs, further mainstream the ‘think small first’ principle into policy-making, and better support businesses in exporting within the single market and to third countries.

State of Israel

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro342,624491,83218,56
Small23,445408,35514,10
Medium-sized3,900313,02712,62
TOTAL SMEs369,9691,213,21445,28

Israeli SMEs were much less affected by the financial crisis which started in 2008 than their counterparts in the EU. Essentially, more SMEs were created, while employment in SMEs consistently expanded between 2008 and 2012. Value added somewhat decreased in 2009 but in 2010 it returned to the path of growth. These developments were mainly driven by strong internal demand and were supported by the appreciation of the Israeli currency (facilitating imports). The situation of export-oriented businesses was more difficult due to unfavourable conditions prevailing in the main export markets since 2008. Israel's SBA profile is strong on access to finance and on internalisation, while second chance and responsive administration offer the most considerable opportunities for improvement. Israeli authorities realise the need to improve regulation and to reduce the existing bureaucratic burden of regulation. The country stands to gain from the introduction of the Regulatory Impact Assessment and of the SME Test which are now both in the development phase. A new 'Digital Israel' National Initiative, expected to improve the quality of public services, is currently being developed.

Italy

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro3,527,4526,629,987201
Small171,6583,049,375141
Medium-sized19,1261,837,003118
TOTAL SMEs3,718,23611,516,365459

The Italian economy has experienced two consecutive recessions, characterised by a decline in exports between 2008 and 2009, and a decline in domestic demand from 2011 onwards, both of which hit SMEs harder than larger enterprises. The third quarter of 2013 marked a halt in the decline in GDP since the summer of 2011. Business confidence has improved. About one third of firms believe they have withstood the most difficult economic phase. Nevertheless, it remains to be seen if SME performance has improved. The difficult economic circumstances made it harder for them to obtain financing from banks, capital markets or other credit suppliers. As a result, the number of SMEs in the business economy fell by 5 % from 2008 to 2013. The value added SMEs generated also decreased sharply, by 15 %, between 2008 and 2009, followed by a protracted recovery ever since. In 2013 the Italian Government therefore took action to foster entrepreneurship and improve access to finance, introducing new measures to reduce labour costs, support female and young entrepreneurship, ease cash flow constraints on SMEs by paying public administration debts, and allowing the payment of taxes to be rescheduled and their payment by instalment. Despite this, Italy continues to have an SBA profile that is below the EU average. Its strengths are the good export performance of its small and medium-sized manufacturing enterprises, in particular the ones from the north-eastern regions which had effective export strategies. That said, the country needs to catch up and improve its performance in many other areas, in particular making it easier for SMEs to access finance, cutting down red tape, making it easier for smaller enterprises to participate in public procurement and reforming its insolvency framework.

Latvia

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro78,200160,4892
Small7,905153,1962
Medium-sized1,511144,1653
TOTAL SMEs87,616457,8507

Latvia’s economy is dominated by small and medium-sized enterprises and has proportionally fewer micro-firms than the EU as a whole. Latvian SMEs provide 78 % of employment and 72 % of value added, significantly higher than the EU averages (67 % and 58 % respectively). The Latvian businesses were hard hit by the crisis, as observed by the falls in employment and value added recorded between 2008 and 2013, of 13 % and 6 % in SMEs, and of 16 % and 5 % respectively, in large enterprises. However, mirroring the developments in other Baltic states, Latvia’s SMEs started to grow again in post-crisis years at high growth rates. Their expansion continued in the first half of 2013, with a value added growth and employment growth of 6.8% and 4% respectively. This good economic performance is mainly due to growth in exports and domestic demand. Latvian SMEs continue to benefit from good framework conditions for trade, an administration that is very responsive to the needs of small businesses, and good access to state aid and public procurement opportunities. Moreover, Latvia’s SBA profile show improvement across the board and performance above the EU average in all areas except environment and skills and innovation. In the latter, it still trails significantly despite recent policy efforts to improve the situation.

Liechtenstein

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro2,5666,4130,50
Small3496,7320,62
Medium-sized555,1600,57
TOTAL SMEs2,97018,3051,69

Due to the positive economic development in Liechtenstein since 2009, the pre-crisis GDP level had already been exceeded in 2011. However, the Statistical Office of Liechtenstein calculated a slight decrease of 0.2% in the nominal GDP for 2012. Overall, during the crisis, Liechtenstein's SMEs performed well and employment in SMEs increased by 11% in the period 2008 – 2012. Export of goods in real terms increased by 1.2% in 2012, whereas imports decreased by 5.8 %. In 2013 exports shrank by 0.2% and imports grew by 1.7%. The recession in the Euro Area as well as the challenging economic dynamics in the neighbouring countries had, and continue to have, a negative impact on Liechtenstein’s exports. Export and import levels remain significantly low compared to pre-crisis levels (due to a strong Swiss Franc / Exchange rate – amount of goods increased). The slightly declining exchange rate of the CHF against the Euro, however, had a stimulating effect. The overall economic situation since the last quarter of 2012 seems satisfactory and enterprises were becoming increasingly optimistic. Liechtenstein pursues mainly an SME policy focused on the establishment of good framework conditions that support the competitiveness and innovativeness of local SMEs. Public consultations with SME stakeholders occur regularly in the legislative process and regulations are already ex-ante tested against their budgetary implications, availability of administrative capacities and impact on businesses. In the absence of a specific national SBA strategy, Liechtenstein concentrates on areas most conducive to its SME sector. Therefore, the most important progress made in 2013 has been in those SBA areas identified as urgent for strengthening the framework conditions of the SME sector, i.e. Responsive administration, Access to finance, Skills & innovation.

Lithuania

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro121,502220,7612
Small10,442215,3743
Medium-sized2,165218,1244
TOTAL SMEs134,109654,2599

The recent development of the Lithuanian SME sector can be summed up as follows. First, a near collapse between 2008 and 2009, with a year-on-year decline in the number of SMEs by 20 % (-28 000), the number of employees by 17 % (-125 000) and gross added value by 35 %. Then, between 2009 and 2013, a steady, though not a complete, recovery. Lithuania continues to have a very good Small Business Act (SBA) profile, scoring above the EU average in entrepreneurship, responsive administration, state aid and public procurement, access to finance and the environment. Its performance was average in three areas. Its only weak spot is skills and innovation, in which it lags behind the EU average. During the economic crisis period of 2008–2013, Lithuania managed to improve conditions in almost all policy areas. Since 2008, it has also made considerable progress in policy implementation in many areas the SBA covers. In particular, it is now easier for many types of SMEs to access finance. The country continued to make considerable progress in implementing the SBA in 2013 by putting in place policy measures addressing nine out of the 10 policy areas under the SBA, particularly in terms of responsive administration and the ‘think small first’ principle. It made the least progress in the areas of second chance and the single market. With regard to future SBA implementation, the biggest problems for SMEs remain getting access to finance, improving the skills and innovation base and making it possible for business re-starters to get a second chance. The recovery is forecast to continue in 2014 and 2015. By 2015, the Lithuanian SME sector is expected to have passed the pre-crisis mark for the number of firms (+2 %). Between 2013 and 2015, it will increase by 8 000 SMEs to a total of more than 142 000. Added value, which recovered much better, is expected to remain at its current level until 2015, when it will have topped the 2008 levels by 25 %. Employment will continue to recover more slowly. Still, by 2015 Lithuanian SMEs are expected to have created 48 000 new jobs in net terms, to reach a total of 701 000 (or 94 % of pre-crisis levels). Micro-firms will recover best.

Luxembourg

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro25,65844,3184
Small3,12961,9674
Medium-sized60558,5115
TOTAL SMEs29,392164,79614

In common with other EU countries, Luxembourg’s business economy is dominated by SMEs, which account for 66.6 % of employment and almost 68 % of value added (about 17 % higher than the EU average). As in many other EU countries, most Luxembourg SMEs are active in the wholesale and retail trade sector, which also accounts for the highest share of SME employment and added value. In contrast to other EU countries however, the manufacturing sector is much less important than elsewhere, and the information and communication sector much more important. The overall economic situation for Luxembourg SMEs in 2013 was good. The mood was more upbeat than in the rest of Europe, thus breaking the trend of the last two years. According to Luxembourg’s monthly barometer, the confidence economic indicator has increased strongly in 2013, reaching a high of +30 points in September. Following the economic crisis, Luxembourg’s real GDP decreased by about 5.5 % between 2008 and 2009. While it grew in 2010 and 2011, it fell slightly again in 2012. Nevertheless, GDP grew overall by almost 7.1 % between 2009 and 2013, thus surpassing the 2008 level by about 1.1 % in 2013. In line with the recovery of the Luxembourg economy, recent estimated data show strong employment growth for SMEs and large enterprises (LEs) between 2008 and 2013. Employment in SMEs increased by 4.5 % and in LEs by 8 %. Furthermore, value added generated by SMEs increased by about 4 % during this period. However, value added generated by LEs decreased by more than 8 %. The difference in performance can be largely explained by the significant fall in value added in the manufacturing sector which is dominated by large enterprises. Luxembourg’s economy continues to rely predominantly on the financial sector, despite the recent expansion of the non-financial services sector (25.2 % of GDP in 2012). Luxembourg’s SBA profile for 2013 is largely in line with the EU average, apart from some areas in which it clearly outperforms its EU peers. These areas are in particular access to finance, internationalisation, internal market and skills and innovation. Despite the change of government and the ensuing transition period of status-quo in implementing new policy, Luxembourg shows steady progress in its SBA profile. With only very few measures implemented in 2013, the newly announced SME action plan is eagerly awaited.

Malta

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro28,90543,5761
Small1,29826,0291
Medium-sized29128,4761
TOTAL SMEs30,49498,0812

Malta´s economy has weathered the crisis of recent years fairly well, and so too did the Maltese SME sector. Over the period 2008-13, SMEs in the business economy grew continuously. The number of SMEs increased by 4 800 (or almost 20 %) to a total of 28 905 firms, and value added grew at a rate of 16.7 %. SME employment also expanded during 2008-13, but slightly less forcefully. Between 2008 and 2013, SMEs added almost 7 000 net jobs to reach a total of some 98 000, an increase of 7.7 % over the entire period. One reason for the good performance of Maltese SMEs was the absence of any financial or housing crisis domestically. Consequently, domestic demand, a key factor for most industries, was less suppressed than in other Member States. The expansion of Malta´s SME sector took place against the backdrop of an SBA profile for the country that has not changed much over the past year. It is a mix of areas with some solid performances, led by the single market indicator where the country is scoring above the EU average, and four areas where Malta has to catch up with the average. The latter comprise second chance, state aid and public procurement, skills and innovation, and internationalisation. ‘Think small first’, where no scores were calculated, needs to be added to the list of SBA areas that deserve specific attention. As 2013 was an election year, legislative activity slowed down significantly. In total, Malta implemented only five significant policy measures addressing 3 of the 10 SBA policy areas in 2013. There was not a single area where Malta achieved significant progress in 2013. The positive trends in SME employment and value added should not give rise to complacency. On the contrary, shortcomings in the various SBA areas, in particular ‘think small first’, skills and innovation, and internationalisation, should be tackled with swift action, for example by full implementation of all provisions of Malta’s Small Business Act of 2011. This could help to put Malta firmly on the EU map as a preferred business location on Europe´s southern rim and at the heart of strategic markets around the Mediterranean. Preliminary estimations for 2015 indicate an increase of some 1500 new SMEs in Malta with a net employment increase of almost 4 000. Value added is also set to expand.

Montenegro

Montenegro performs particularly well in the area of entrepreneurship. Insolvency procedures are competitive when compared to EU average values. Funding also appears to be relatively available (access to finance), although this conclusion is made on a minimum required number of available indicators (4) and it is not possible to draw a more detailed picture. At the same time Montenegrin SMEs have taken up environmental topics to quite an advanced degree – in particular as regards the extent to which they offer green products and services. Internationalisation of SMEs exhibits average performance, although burdensome aspects of import and export procedures are visible in the data. The performance of administration is the main area in which Montenegro trails behind the EU average. Most procedures are fairly burdensome (in terms of required paperwork and time to complete), although somewhat less expensive than elsewhere in the EU. Macroeconomic forecasts inspire optimism with real GDP expected to have increased 2.3% in 2013 and forecast to grow by 3.6% in 2014. The growth should be mainly driven by several large tourism investments, preliminary works for the interconnection energy cable with Italy, and by the construction of the first highway in the country.

Netherlands

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro752,4441,506,62961
Small41,3391,051,73158
Medium-sized8,3041,003,49770
TOTAL SMEs802,0873,561,857189

The problems of the Dutch economy continued to be marked by stagnating aggregate demand due to a high level of private household indebtedness in combination with a still distressed housing market. These problems weighed on the domestic SME sector, as SMEs are more dependent on local demand than larger firms. SME employment has decreased since 2011 and slipped by another 23 000 jobs in 2013. Although this loss was limited in absolute terms and represented more a stagnation in relative terms, it nonetheless shows that the Dutch SME sector finds it difficult to follow the emerging recovery in other Member States. On a positive note, despite a slight decline in 2013, the number of SMEs remained at a very high level. This is mainly fuelled by a very positive attitude towards entrepreneurship. The business environment on offer to Dutch SMEs is marked by particularly favourable conditions in entrepreneurship, second chance, responsive administration and single market. On the downside, state aid and public procurement and, in particular access to finance are the two areas where the Netherlands trailed the EU average. Already in past years, the Dutch government undertook a series of measures to ease the financial distress of Dutch SMEs. It continued these efforts in 2013 with a focus on venture capital and alternative financing instruments. An effort was made to mobilise the resources of insurance companies and pension funds as sources of credit for SMEs, so as to compensate for the restrictive loan policies of banks. Apart from the stagnating growth, access to finance remains the single most important challenge to Dutch SMEs and the government will have to continue addressing this challenge. Overall, the government was very active in 2013 in further improving the business environment. It implemented a substantial number of policy measures addressing 8 out of the 10 policy areas under the Small Business Act. The areas with the most significant progress in 2013 were responsive administration (creation and major reform of three key organisations) and state aid and public procurement (the new Procurement Act). Other particularly noteworthy measures were taken in the areas of second chance (Recalibration of Bankruptcy Fraud programme), ‘think small first’ (Well Arranged programme), access to finance (Business Financing programme), environment (National Energy Agreement) and innovation (Topsector approach). The outlook for 2014 and 2015 is positive pointing at a recovery in terms of job creation and value added after years of stagnation. However, the very modest nature of this recovery provides no reason for complacency in terms of SBA implementation.

Norway

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro259,250381,66087
Small19,597368,37232
Medium-sized2,930287,35038
TOTAL SMEs281,7771,037,382156

Intelligent use of wealth from petroleum resources and active use of monetary policy have prevented Norway from the worst of the financial crisis and supported their recovery from the recession. During the last year, the SME sector in Norway achieved a growth in employment of around 32 000 persons. Notably, this surplus was created solely by micro and medium-sized companies. Small companies actually accounted a loss of around 9 000 persons. The relative strength of the Norwegian SME sector seems to lie in the high productivity of its small enterprises which, in comparison with other countries, generate more turnover with fewer employees. Thus, small businesses were successful in increasing their value added by 18.5% despite the decrease in the number of employees. Norway provides a very favourable business environment for SMEs, with particular strengths in the SBA areas of responsive administration and second chance. The SBA profile of Norway remains far above the EU average. However, in three areas, namely entrepreneurship, access to finance, and environment some relative deteriorations have been detected which can be explained by the scarcity of private venture capital, the less pronounced will of the Norwegian population to be self-employed (which is linked to the fact that Norway’s labour market offers excellent conditions) and, surprisingly, the decline in the number of companies working in the field of “green economy”.

Poland

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro1,407,4273,007,50428
Small52,6761,121,51027
Medium-sized14,8501,550,09839
TOTAL SMEs1,474,9535,679,11294

The overall economic situation of Polish SMEs was stable in 2013. The lack of significant change from the previous year mirrored the country’s macroeconomic performance: GDP rose by 1.6 %, while inflation, unemployment and the EUR/PLN exchange rate remained largely unchanged. Poland has been successful in offering slightly better than average access to finance for its small and medium sized enterprises. Otherwise, the SBA profile shows performance in line with the EU average in most areas: entrepreneurship, responsive administration, state aid and public procurement and environment. Government action in 2013 was pragmatic, focusing new policy measures on ‘low investment—high return’ areas: responsive administration, including e-government services, and public procurement (particularly that geared to aiding the absorption of financing earmarked for Poland in the Multiannual Financial Framework). Key challenges include simplifying burdensome regulations (the ‘think small first’ principle is neither systematically implemented nor sufficiently well integrated into mainstream policy action) and fostering the development of skills and capacity to innovate. Furthermore, Poland needs to improve SMEs’ access to the single market and to non-EU markets. Lastly, the prevalent lack of trust in the public administration is a barrier to business growth, and is reflected in the dominance of microenterprises that generate low value added. A first step towards tackling this problem would be to provide reliable and high-quality public and judicial services.

Portugal

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro739,5551,230,99015
Small30,732588,42415
Medium-sized4,547444,61014
TOTAL SMEs774,8342,264,02444

SMEs account for 79 % of Portugal’s employment and 66 % of value added, considerably higher proportions than in other EU countries. Microenterprises comprise the vast majority of firms in Portugal — 95.4 % — and provide more than 40 % of private sector jobs. Between 2008 and 2013 Portuguese SMEs had to shed a total of more than 350,000 jobs, a reduction of 13.5% of the total SME workforce in 2008. Value-added as well as the total number of SME also declined, although the latter to a much lesser extent. The Portuguese economy has not yet recovered from the crisis but incipient signs of improvement over the last three quarters of 2013 suggest a brighter outlook. Projections point to a modest recovery of GDP growth in 2014 and 2015. Nevertheless, a number of structural constraints will continue to hold back the Portuguese economy’s growth potential in the near term. These are, in particular, the high indebtedness of the public and private sector, the active population’s relative lack of qualifications and long-term unemployment in some parts of the labour market. Portugal’s SBA profile remained in line with the EU average in 2013. By far the best performing SBA area was entrepreneurship, as the Portuguese economy is characterised by intense and high-quality entrepreneurial activity that is underpinned by a remarkably positive entrepreneurial culture. At the other end of the scale, the still limited access to finance and public procurement is a significant obstacle to small business growth. In 2013, the government introduced policy measures offering guarantees and risk capital to SMEs and took action on late payments, thereby helping to address the scarcity of finance in the economy.

Romania

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro373,944931,0917
Small44,682929,4999
Medium-sized7,669848,21610
TOTAL SMEs426,2952,708,80626

Romania’s economy is dominated by small and medium-sized enterprises and has proportionally fewer micro-firms than the EU on the whole. Despite an increase in the number of business start-ups in recent years, the impact of micro-firms on the economy is still lower than average, providing about 23 % of private sector employment and only 13 % of economic added value. The manufacturing sector is very important for SMEs, accounting for a proportion of employment 30 % higher than the EU average. SMEs in the service sector dominate the economy far less. They focus on less knowledge-intensive activities such as retail and wholesale trade, food services and accommodation, travel agencies, rental and leasing services, land transport and courier services. The economic crisis has badly affected the business sector. SMEs in particular were badly affected, with real GDP decreasing sharply during the crisis (-6.6 %) and post-crisis recovery setting in late, with modest growth of 2.2 % in 2011 and 0.7 % in 2012. However, growth picked up to 3.5 % in 2013, the highest rate of economic growth in the last five years. In general, large enterprises appear to recover from the crisis much faster than SMEs. This is because Romanian SMEs are less competitive, less innovative and have a weaker technological base than their larger counterparts. Romania had a ‘catching up’ profile in 2013, with most areas scoring below average, but some progress in the past few years. Romania performs above average only in entrepreneurship, albeit by a large margin. The lack of innovation and a shortage of specialised skilled labour are the main obstacles to the business sector’s competitiveness. Poor administrative capacity continues to hamper the growth of business.

Serbia

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro272,299592,8153,0
Small8,984181,0332,3
Medium-sized2,103223,3672,7
TOTAL SMEs283,386997,2157,9

The SME sector in Serbia was hit hard by the global recession of 2008. It experienced a brief period of recovery in 2011, but fell back into recession in 2012. However, in 2013 the economic situation improved as nominal GDP grew by 8 % as compared with 2012. Growth in value added since 2010 was mainly driven by expanding exports. Nevertheless, the positive developments between 2010 and 2011 were not strong enough for the economy to return to pre-crisis levels: in 2012, value added and employment were 8 % and 12 % below 2008 levels. The investments linked to Serbia’s EU accession prospects and reforms suggest that more progress will be achieved in the medium term. Serbia’s SBA profile is improving slightly, but still far below the EU average. Most of the progress relates to the first SBA principle — entrepreneurship. The latest results on environment indicate that Serbia is on the right track in this respect as well. In many areas, the limited availability of data still makes it difficult properly to assess progress. Despite the Serbian authorities’ strong efforts to create a framework to facilitate access to finance, the capital market has shrunk massively. The areas in which Serbia still needs comprehensive reforms are ‘responsive administration’, ‘skills & innovation’ and ‘internationalisation’. Clearly, the administrative procedures and requirements facing Serbian SMEs are too burdensome and costly. Modern methods of e-government still need to be introduced.

Slovak Republic

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro375,780537,76010
Small13,810263,3877
Medium-sized2,213230,2546
TOTAL SMEs391,8031.031,40123

The Slovakian business economy is heavily dependent on SMEs as they provide 72 % of employment and 67 % of value added, well above the respective EU averages of 67 % and 58 %. Most firms are in services and retail trade but manufacturing is also an important sector: although it does not comprise very large numbers of SMEs, it contributes 25 % to employment and 22 % to the value added of the SMEs in Slovakia’s business economy. The Slovakian economy was not spared from the economic crisis and suffered a 4.9 % fall in real GDP between 2008 and 2009. Yet recovery set in just a year later and thanks to growth of 3 % in the following year, Slovakia’s economy managed to exceed its pre-crisis level by 2.2 % in 2011. However, this upward trend is slowing, with economic growth down to 0.8 % in 2013. At the same time, corporation tax increased from 19 % to 23 %. This had a negative impact on smaller businesses in particular, resulting in a worsening business environment. Overall, in 2103 Slovakia’s SBA profile was mixed, with comparative strengths in environment, access to finance and public procurement and weaknesses in internationalisation and second chance. It is felt that SMEs would benefit if the principle of ‘think small first’ were implemented more widely in decision-making, insolvency procedures were streamlined and contracts better enforced.

Slovenia

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro109,050188,1744
Small5,470105,7633
Medium-sized1,078111,8214
TOTAL SMEs115,598405,75811

The difficult overall economic situation since 2008 has had a negative impact on the development of the SME sector. While the number of SMEs actually grew by more than 9 300 to a total of 109 247 in 2013 (an increase of more than 9 %), SME employment and value added declined in the same period. SMEs shed some 34 000 jobs during the period bringing total SME employment down to less than 406 000 in 2013 (-7.9 %). Overall, Slovenia’s SBA performance is balanced in most of the SBA principle areas, and Slovenia´s score is in line with the EU average. There was one area — environment — where the country stood out from the EU average, while there were two — responsive administration and access to finance — where Slovenia still lagged behind the EU. As regards changes over time, the Slovenian profile does not reveal a clear overall trend. The most remarkable development is the drastic deterioration in conditions relating to access to finance in 2008-13. It should be noted that Slovenia was among the first EU countries to adopt a national strategy to implement the SBA. The strategy and action plans were very ambitious from the start, and have been reviewed by the government on a regular basis. The SBA area of responsive administration has been a particular focus of SBA policy-making since 2008. However, the volatile political and economic background, plus insufficient coordination among the various ministries involved in SME policy-making, have prevented better implementation of the SBA agenda. Besides better coordination of SME policy and more systematic implementation of the ‘think small first’ principle, particularly the SME test, more efforts are required to help Slovenian SMEs improve their access to finance, a crucial problem for most of them. The overall economic outlook for 2014 in Slovenia is better than for previous years. However, forecasts for Slovenia´s SME sector in the 2013-15 period are less optimistic. The number of SMEs is set to decline by almost 4 000 (-3.4 %), and SME employment by almost 16 000 (-3.9 %); only value added is expected to grow slightly (1.2 %), due mainly to micro- and small firms.

Spain

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro2,129,5494,206,346122
Small109,2122,041,95883
Medium-sized14,0161,384,44577
TOTAL SMEs2,252,7777,632,749282

The Spanish economy is emerging from a deep and prolonged recession that has engulfed its economy since 2008. The incipient recovery was driven by a boom in exports, which grew by 5.2 % in 2013, reaching the record level of EUR 234 billion. The boost in export performance is partly due to the labour reforms that helped raise productivity and reduce unit labour costs, resulting in a positive effect on the competitiveness of firms. However, the recovery is still fragile and significantly more effort is needed to create jobs. Real GDP in 2013 was still 6.7 % below its 2008 peak1, and a full return to the pre-recession level is still not within sight. Furthermore, internal demand remains weak because of private sector indebtedness and also because of the strong recession that has led to a dramatic increase in unemployment. On the public policy side, Spain has made important progress in improving its insolvency framework, in internationalisation and in reducing red tape. In addition, various measures were implemented in 2013 with the aim of giving more flexibility and dynamism to the labour market, facilitating access to finance and promoting entrepreneurship culture. Despite these initiatives, the country’s performance across the SBA principles continues to be below the EU average. There is broad consensus on the need to continue supporting SMEs and the self-employed, and more policy initiatives are expected, particularly in areas such as access to finance, administrative simplification, research and development, competitiveness improvement and knowledge transfer.

Sweden

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro631,004793,52045
Small29,670658,93838
Medium-sized5,145564,45139
TOTAL SMEs665,8192,016,909121

In common with other EU countries, the Swedish business economy has a significant number of SMEs, which together account for 59 % of value added and 66 % of employment. Microenterprises are comparatively more prevalent than in the EU, making up 94.6 % of all enterprises. The Swedish economy was hit hard by the crisis, and real GDP dropped by 5 % between 2008 and 2009. 2010 saw a swift recovery, but over the following two years, growth slowed to around 1 %. In the second half of 2013, the trend was reversed as economic sentiment improved for the first time since 2011, due largely to the domestic stimulus in the form of tax decreases, which benefited households and generated increased consumption. Sweden provides one of the most favourable business environments for SMEs, with particular strengths in access to finance, skills and innovation and internationalisation. In 2013, Sweden adopted or implemented 17 policy measures, addressing eight of the ten policy areas under the Small Business Act (SBA). Overall progress in implementing the SBA over the reference period has been moderate, partly because Sweden already had very good results in most SBA areas. Seven principles performed above the EU average in 2013.

Turkey

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro2,326,1485,019,84529
Small42,6411,327,07719
Medium-sized18,1321,830,24230
TOTAL SMEs2,386,9218,177,16478

Economic growth in Turkey was briefly interrupted by the 2009 global recession due to the drop in international demand and structural problems with international competitiveness. Turkey recovered quickly but GDP growth slowed again in 2012 as a result of weak domestic demand and spill-overs from the European debt crisis. Due to domestic political events and the civil war in Syria, Turkey’s financial markets and the lira have been under great pressure. Consequently private and public consumption has decreased in real terms, while the international price competitiveness of Turkish products and services is improving. The figures recorded by Turkish SMEs have reflected this backdrop. The exceptionally high rates of GDP growth have been accompanied by a significant increase in employment and value added. Small firms, in particular, have seen extraordinary growth. From 2009 to 2011, the number of companies in this sector doubled, value added increased by 85 % and employment rose by 96 %. By contrast, the data for micro-enterprises suggest low productivity and weak development. Turkey´s SBA profile is now in line with the EU average, which represents an improvement from the past. Turkey maintained its traditionally strong results for entrepreneurship and chalked up considerable improvements on environment and small ones on skills & innovation and second chance All in all, Turkey shows big improvements and is now in line with the EU average. However, the country still lags well behind in internationalisation and the use of new information technologies in public administration. Given the favourable position of its currency at the moment, Turkey should focus on improving the conditions for SMEs to get more involved in international trade by promoting training and innovation in IT tools.

United Kingdom

Basic Figures - 2013
Number of enterprisesNumber of employeesValue added
(Billion €)
Micro1,538,2823,092,499199
Small159,4073,514,010170
Medium-sized26,9332,991,926162
TOTAL SMEs1,724,6229,598,435531

Since 2010, the UK´s SMEs have added some 700 000 new jobs, bringing total employment in the sector to almost 10 million in 2013, a 7 % increase. The number of SMEs rose in the same period by some 130 000 to approximately 1.8 million. This rebound was helped by a business environment which is among the most conducive for SMEs in the entire EU. In five of the SBA areas the United Kingdom ranked above the EU average. Second chance, responsive administration and internationalisation are particular strengths, but the UK also outperforms the EU in skills & innovation and environment. There are, however, also areas with room for improvement. UK SMEs tend to get less involved in the public procurement market, both within the UK and elsewhere in the EU. Recent government initiatives to make public tenders more accessible to SMEs are expected to change this. Increased efforts to help UK SMEs seize the opportunities of the single market and of non-EU markets also look promising. Increasing exports by SMEs and other companies, especially in the manufacturing sector, has been declared a policy priority, but there has been relatively little follow-up by way of specific support measures. While access to finance is more difficult in many other EU Member States, there are many UK SMEs which find it hard to get financing, in particular when it comes to bank lending. Yet, with the implementation of a number of high-profile measures, access to finance has been, together with responsive administration and the ‘think small first’ principle, the focus of national SBA policy in recent years. The publication of Small Business: GREAT Ambition in December 2013 also set out a range of cross-government commitments to support small business, encourage growth and ensure that the UK is the best place to start and grow a business. The good business environment is expected to enhance the expansion of the UK SME sector in 2014 and 2015 as well, with all important indicators — the number of enterprises, employment and value-added — set to increase.

SBA Fact Sheets database

Select a country and SBA principle to see data:

Policy Studies

Attitudes of European entrepreneurs towards eco-innovation

1. Flash Eurobarometer on SMEs, Resource Efficiency and Green Markets (16/12/2013)

In December 2013, the European Commission published the second Flash Eurobarometer analyzing the role SMEs play in resources efficiency and green markets.

As the study reveals, 42% of EU SMEs have at least one full or part-time green employee, a 5% increase in respect of last Flash Eurobarometer, which exceeds the expectations set by businesses themselves in March 2012. However, there is still a lot of untapped potential to be used by SMEs when it comes to exporting green products and services, as well as room for improvement when green public procurement and environmental management systems are concerned.

Check out the Eurobarometer results here:

Report summary
Full report
Attitudes of European entrepreneurs towards eco-innovation

2. Flash Eurobarometer on SMEs, Resource Efficiency and Green Markets (27/03/2012)

In March 2012, the European Commission published the first Flash Eurobarometer analyzing the role SMEs play in resources efficiency and green markets.

As the study reveals, green jobs are mostly created in SMEs compared to large companies as 37% of EU SMEs have at least one full or part-time green employee. However, there is still a lot of untapped potential to be used by SMEs when it comes to the single market for green products and services, and a room for improvement when cross-border administrative and legal procedures are concerned.

Check out the Eurobarometer results here:

Report summary
Full report
Do SMEs create more and better jobs?

3. Study on the SMEs' impact on the EU labour market (16/01/2012)

What role SMEs play in creating more and better jobs? The answer to this question was the main objective of the Study on the SME's impact on the EU labour market published by the European Commission in January 2012.

According to the analysis, 85% of net new jobs created in the EU between 2002 and 2010 were in fact created by SMEs. This figure is considerably higher than the 67%-share of SMEs in total employment.

The study has also shown that new companies (younger than five years) are responsible for an overwhelming majority of the new jobs created in the EU.

Consult the report here:

Report: "Do SMEs create more and better jobs?" pdf - 977 KB [977 KB]
Methodological note pdf - 328 KB [328 KB]
EU SMEs and subcontracting

4. Study on EU SMEs and subcontracting

The aim of the study published in 2009 formed a picture of SMEs' subcontracting practices and identified room for policy actions targeted at SME subcontractors.

Access the study documents here:

Report on EU SMEs and subcontracting pdf - 2 MB [2 MB]

Contact

entr-spr@ec.europa.eu

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