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Small and medium-sized enterprises (SMEs)

Craft and micro-enterprises

Craft enterprises provide a wide range of vital products and services at local level. Many are very small firms - indeed often only the owner is involved. Micro-enterprises, of which many are craft firms, face particular challenges due to their small scale. They are nonetheless an important segment of the European economy and specific efforts to help them are essential for European growth.

Craft enterprises, for example carpenters, butchers, bakers, roofers, metal workers or information technicians, provide vital products and services for their local communities all over Europe. Moreover, they create jobs for local people. In contrast to larger firms, the heads of such enterprises are fully involved in all aspects of the business and remain in direct contact with customers. Micro-enterprises share many of the difficulties faced by firms in the craft sector, although they could be operating in any industrial sector.

Whilst over 99% of all enterprises in Europe are SMEs, 90% of SMEs are actually micro-enterprises - with fewer than 10 employees - and the average company has just five workers. However, these micro-enterprises account for 53% of all jobs in Europe, so their importance to the European economy is enormous.

Their small size and limited resources mean micro-enterprises face particular problems. Finding the finance to get a new business going, or to grow an existing one is a difficult challenge. The administrative tasks, or red tape, which all firms have to carry out weigh particularly heavily on Europe's micro-enterprises. And finding staff with the right skills, willing to work for a small firm can be a problem, as is ensuring they have the time to update their skills and keep up with developments in the field.

Whilst micro-enterprises are very often the source of innovation, they are also especially vulnerable to competition from counterparts who introduce new products or services, or improve their production processes, lacking the resources to respond rapidly.

Common characteristics of craft (-type) and micro enterprises

While there is a European SME definition, there is no European definition for craft enterprises. This is mainly due to the very different legal or non-legal aspects and understandings at national level of what a craft enterprise is. In lack of a European definition, there are, nevertheless, some characteristics craft enterprises have in common all over Europe and which reflect the vast majority of micro enterprises at the same time:

  • strong involvement of the owner or head of the enterprise in all steps of the workflow (financial independence, strong personal responsibility)
  • craft, technical and management competences (apprenticeship as one means of passing on those competences)
  • active contribution to production of products and services (in particular tailor-made and single-size-products or in small quantities)
  • proximity to the client and local activities.

European support

The European Commission aims to promote successful entrepreneurship and improve the business environment for SMEs, to allow them to realise their full potential in today's global economy, notably through the Small Business Act (SBA) for Europe. Whilst the SBA seeks to improve the business environment  for all sizes and types of SMEs, the Commission recognises that specific initiatives and sustained efforts are required to enable Europe's smallest firms to realise their true potential. It is therefore undertaking work in a range of areas to help and encourage Member States identify and implement measures in support of craft and micro-enterprises.

More specifically, the Commission aims to

  • increase the knowledge of the sector through studies, conferences and workshops and statistics
  • identify obstacles to the sustainable development of these enterprises and to prepare proposals to address them
  • enhance craft and small businesses' capacities for growth in the internal market, for instance through SME friendly European standards and better knowledge about them, through improved access to public procurement or through the promotion of innovation and research in micro- and craft businesses through cooperation, as well as
  • promote a more favourable business environment for craft and small enterprises through quality support services, better legal and fiscal environment, social protection of new entrepreneurs etc.

Encouraging craft and micro businesses to invest in life-long learning

Increased global competition, the transition to a knowledge-based society, and rapidly changing technology transform most aspects of the working life of a small firm and craftsmen. In the future, they will need people with different occupational skills, with specific job profiles and with more medium- and high-level qualifications. More than ever, all Europeans need to continually update their skills and professional competences. This is why the Commission is considering an exchange programme for apprentices to allow them to gain work experience in another European country. Currently, craft and micro enterprises can benefit from mobility actions through the EU's Leonardo da Vinci programme.

Skills needs in micro and craft enterprises

Micro-enterprises in particular are affected by shortages of skilled labour, and need to overcome their difficulties in attracting the most skilled workers. The Commission strongly supports initiatives to identify future skills needs and to make education and training more available to employers and employees alike throughout their whole professional lifetime.

In 2009 the Commission launched a study to identify the future skills needs for micro and craft (-type) enterprises. The study presents the most important skills needs from the point of view of enterprises, business organisations and training institutes. The field work was carried out in eight European countries (Austria, Bulgaria, Denmark, France, Germany, Italy, Poland, United Kingdom) focusing on the three sectors (construction, food, personal/health services). The results identify actions needed to forecast future skills needs, to better communicate future skills needs and to integrate them more systematically in training schemes for craft and micro companies.

  • Summary of the final report pdf - 329 KB [329 KB] български (bg) dansk (da) Deutsch (de) français (fr) italiano (it)
  • Final report pdf - 2 MB [2 MB] Deutsch (de) français (fr) "Identification of future skills needs in micro and craft (-type) enterprises".

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