Data from June 2025
Planned update: May 2026
Highlights
In 2022, young enterprises in the EU had an average annual employment growth rate of over 12% in the first 5 years of their operations.
In 2022, the contribution of newly born enterprises to employment in the business economy was below 2% in Finland, Germany, Denmark, Luxembourg, Austria, Sweden and the Netherlands, but above 5% in Greece, Estonia and Portugal.
This article presents results about
- newly created enterprises in the year 2022 as well as young enterprises that were established 1 to 5 years before the reference year 2022 and have survived until then. The article highlights their contribution to employment growth in the business economy.
- young high-growth enterprises ('Gazelles'). Gazelles are a specific sub-population of high-growth enterprises (HGE) defined by their age of a maximum of 5 years. These companies have shown their potential for high growth already in the early years after start-up.
- the innovation activity of enterprises, e.g. by the age of the company or its belonging to an enterprise group.
Why are young enterprises important for the economy ?
The creation of an enterprise offers opportunities, not least the possibility to make the dream come true of becoming independent and self-employed. Often, there is a strong relationship between a new enterprise and the owner behind – the entrepreneur. ‘Entrepreneurship’ matters: it adds to the dynamism, agility, openness, and diversity of the society.
Moreover, new enterprises are of key importance for generating new jobs and economic growth. Most new companies start up without or with only very few employees. However, even where the job creation by young enterprises might be limited in the first years, they lay the groundwork for later growth.
To provide information on the evolution of entrepreneurial activity and the dynamics within the business economy, Statistics on Business Demography document important events in the life cycle of an enterprise from creation to dissolution, thereby offering insights into enterprise survival or discontinuity. Important statistical indicators of business demography statistics are data on
- births of enterprises
- survivals of newly created enterprises
- (young) High Growth Enterprises (HGE)
- deaths of enterprises
In the policy discourse, the term ‘startups’ is mostly associated with enterprises which do not only exhibit high growth rates, but also above average innovation. The Community Innovation Survey (CIS) is a survey on business innovation that reports for example about how many enterprises translate inventions into innovation that result in the introduction of new business processes in the firm or new products in the market, and translate these innovations into commercial success. These results also show the innovation activity of companies in relation to its age or group status (belonging to an enterprise group).
Birth of enterprises and their contribution to job creation
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Source: Eurostat (bd_size__custom_17182519)
Figure 1 shows enterprise birth rates in 2022 across different sectors, reflecting the number of new enterprises relative to all active ones. While some sectors thrive as breeding grounds for new enterprises, others seem to face inherent hurdles that impact enterprise creation. In 2022, the ‘Administrative and support service activities’ sector stood out with a high birth rate of 16.4%, indicating a dynamic and accessible sector for new businesses. Technology-driven sectors like ‘Information and communication’ and ‘Professional, scientific and technical activities’, as well as socially relevant sectors like ‘Education’ or ‘Arts, entertainment and recreation’, displayed robust birth rates, driven by digital transformation, an increased demand for innovative solutions, and for a society and economy capable of absorbing change.
This contrasts with ‘Mining and quarrying’ which showed a low birth rate of 5.7%, likely due to high economies of scale and entry barriers, and regulatory challenges. Low birth rates were also observed also in ‘Water supply; sewage and waste management’ (6.8%) followed by ‘Manufacturing’ and ‘Wholesale and retail trade’ with birth rates close to 8%.
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Source: Eurostat (bd_size__custom_17177540)
When an enterprise is born, a new economic entity is created. Figure 2 shows the proportion of enterprise births by number of employees in 2022. Newly created enterprises were very small: for the total economy (industry, construction, market services)
- 83% of new businesses consisted solely of self-employed individuals;
- 16% launched with 1 to 4 employees;
- 0.8% of all born enterprises had 5 to 9 employees;
- 0.4% 10 or more employees.
This highlights the prevalence of solo entrepreneurs or owner-driven ventures, especially in industries like ‘Electricity, gas, steam and air conditioning supply’, ‘Education’, and ‘Arts, entertainment and recreation’ where the percentage of businesses starting without any employees (i.e. consisting solely of self-employed individuals) was above average. ‘Education’ saw as much as 93% due to the prevalence of independent educators, freelance tutors, and online course creators who can operate as sole proprietors with low start-up costs and flexible business model.
Conversely, ‘Accommodation and food service activities’ stood out, as 38% of new enterprises started with 1 to 4 employees, indicating an immediate need for personnel. Also industries such as ‘Mining and quarrying’ and ‘Water supply; sewerage, waste management and remediation activities’ had a relatively higher percentage of new enterprises starting with 5 to 9 employees, indicating that those sectors often require larger initial teams due to the collective nature of the tasks. Finally, sectors like ‘Human health and social work activities’ and ‘Professional, scientific, and technical activities’ showed very few new enterprises with 10 or more employees, underscoring the cautious approach new entrants take given the complexities or resource constraints.
Source: Eurostat (bd_size__custom_17167766)
Figure 3 shows the share of new jobs created in total jobs available (represented by columns and percentage on the left axis) as well as average size of enterprises in terms of persons employed (presented by dots and number on the right axis).
In 2022, newly born enterprises in Greece accounted for a significant 6.7 % of employment in the business economy. For Greece, the high rate of new jobs coincided well with a high average of 2.6 persons employed per created enterprise. In the EU, the average size of newborn enterprise was 1.1 persons. High numbers of jobs per enterprise might reflect a cultural inclination towards slightly larger business setups, or perhaps a business environment where starting a business requires a small team to handle early operational demands; it might also reflect below average labour costs.
The second-largest share of new jobs was recorded in both Estonia and Portugal with 5.8% each. In addition, they had a similar average size of born enterprises (1.3 and 1.1 persons respectively). On the other side of scale were Germany, Denmark and Luxembourg (share of new jobs from 1.1 to 1.2%). The average size of newborn enterprise for Germany reached 1.6 persons. In contrast, Finland and Denmark exhibited the smallest sizes, with averages of 0.4 and 0.9 respectively, which might partly be due to many new ventures not having any persons employed, like holding companies, or that they start later in the year bringing the annual average down. Such differences could be partly attributed to local economic conditions, regulatory and fiscal environments, societal attitudes towards entrepreneurship or prevalence of NACE sectors in the respective countries.
Source: Eurostat (bd_size__custom_15263052)
In 2022, the landscape of young enterprises—those aged 1 to 5 years—across the EU showed varying levels of employment contributions within different sectors (see Figure 4)[1] . These are young enterprises that were established 1 to 5 years ago and survived until 2022. These emerging enterprises are vital to several economic activities, though their impacts differ significantly by industry.
Within the real estate sector, young enterprises accounted for 19.8% of employment, provided by 0.4 million new enterprises, indicating significant growth potential and adaptability. A very similar pattern was also observed in ‘Arts, entertainment, and recreation’ with a high rate of employment in new enterprises (19.3%) and a relatively low number of new enterprises (0.3 million).
The construction sector also showed strong engagement, with young enterprises making up 18.4% of employment and totalling 1.2 million enterprises, which is one of the highest numbers of young enterprises among the sectors, exceeded only by ‘Professional, scientific and technical activities’ and ‘Wholesale and retail trade’, each accounting for more than 1.5 million new enterprises in 2022.
Service-oriented sectors, such as ‘Professional, scientific, and technical activities’, ‘Accommodation and food services’, and ‘Education’, exhibited substantial employment shares from young enterprises accounting for close to 18%, probably driven by evolving market needs and innovation. Though the number of young enterprises in those sectors varied greatly, the first had one of the highest numbers among sectors, and the latter 2 accounted for 0.5 million and 0.3 million, respectively.
In the ‘Information and communication’ sector, young enterprises contributed 13.3% to employment, while in ‘Administrative and support services’, they accounted for 12.7%. These figures demonstrate a moderate but significant presence of young businesses in these industries.
Traditional sectors like ‘Wholesale and retail trade’ saw young enterprises contributing 9.6% to employment, while in ‘Human health and social work activities’ they accounted for 8.5%.
Conversely, in capital-intensive sectors such as ‘Manufacturing’ (4.8%), ‘Water supply; sewerage, waste management’ (4.0%), ‘Electricity, gas, steam and air conditioning supply’ (3.9%), and ‘Mining and quarrying’ (2.6%), young enterprises had lower employment contributions as very few new enterprises were present in these sectors, with the last 3 sectors accounting for only 0.7% of all new enterprises in 2022. These figures reflect high economies of scale and complexity of these industries.
_v_3_.png)
Source: Eurostat (bd_size__custom_17190495)
Figure 5 provides a look into the resilience of 5-year-old enterprises, born in 2017 and surviving until 2022, across the EU and their employment contributions, illustrating the varied impacts that these surviving businesses had on each country's economic landscape. At 5.4%, Slovakia had the highest share of survived 5-year-old enterprises out of the total active enterprises, suggesting a favourable environment for business continuity and a resilient entrepreneurial spirit. Hungary and Romania also displayed relatively high survival rates. Notably, Latvia exhibited a solid 4.1% share of surviving enterprises and achieved the highest employment share at 4.0%, highlighting its significant role in job creation within the 5-year-old cohort. Conversely, Germany had a modest 2.8% share of 5-year-old surviving enterprises and a notably low employment impact of 0.9%. Overall, resilience in business survival did not always translate to an equivalent employment impact, underscoring the complex interplay between survival strategies, economic conditions, different degrees of capital intensity and automation of production, and employment dynamics.
Employment growth in young enterprises
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Source: Eurostat (bd_size__custom_17237708)
Employment growth is a fundamental objective of economic policy, and young enterprises significantly contribute by creating new jobs. The survival of these businesses is equally important, as it sustains employment and fuels innovation, driving economic vitality. In 2022, the analysis of employment growth among young enterprises across various EU sectors presented intriguing insights (Figure 6). Here employment in young enterprises in 2022 was compared to the annual average employment in the year of birth of the same enterprises. This can significantly magnify the impact of small absolute changes for enterprises with fewer starting employees.
The total business economy observed a rapid increase in employment of new enterprises, particularly in the first 2 years of their activity. Employment in 1-year-old enterprises increased by 34.2% compared to the year of birth. Enterprises that were born in 2020 reached 54.5% employment growth by their second year and 58.8% growth was observed for 3-year-old enterprises. Enterprises founded in 2018 also continued to grow steadily, achieving 70.7% by the fourth year; those born in 2017 reached an increase of 78.9% by the fifth year, which corresponds to an average annual growth rate of over 12%.
The disparity in results across sectors might partly be attributable to the scale of employment changes, where even small numerical increases represent substantial percentage growth in smaller enterprises. The industry sector displayed strong early growth with employment figures peaking at 72.0% by the third year for enterprises born in 2019. Interestingly, the growth rate for 5-year-old enterprises (born in 2017) was not so rapid compared to other sectors reaching 67.6%, suggesting a levelling as these companies reached operational capacities, faced market saturation or were impacted by the COVID-19 pandemic.
The services sector mirrored the overarching business economy trend, as most new enterprises were in the services sector, with measured growth from 32.9% in 1-year-old enterprises to 79.4% in 5-year-old surviving enterprises. As illustrated in Figure 6, 3-year-old enterprises born in 2019 experienced less rapid growth compared to other years, reaching 57.0%. The consistent expansion in services underscores the sector's flexibility and resourcefulness in navigating economic shifts and disruptions, like the COVID-19 pandemic.
Construction stood out with remarkable growth patterns, starting at 37.7% after 1 year and soaring to 85.0% for enterprises that survived 5 years. This surge reflects continued demand for construction services, potentially fuelled by recovery-focused infrastructure investments post-pandemic, or a tendency to easily set up new enterprises in the construction sector.
Young high-growth enterprises
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Source: Eurostat (bd_hg__custom_15265121)
Figure 7 illustrates data on young high-growth enterprises, known as ‘Gazelles’, a specific subset of high-growth enterprises (HGEs) that are no more than 5 years old. These enterprises have demonstrated significant potential for rapid expansion early in their development.
Leading the way, the construction sector registered around 1 810 high-growth enterprises, followed by accommodation and food service activities with 1 710. A key factor contributing to their success is the relatively low barriers to entry in these industries, such as comparatively low requirements for capital and education levels.
Following closely are administrative and support service activities with 1 640 young high-growth enterprises, and wholesale and retail trade (including repair of motor vehicles and motorcycles) with 1 560. These sectors benefit from similar advantages, enhancing their ability to adapt and scale rapidly.
Contrastingly, sectors such as ‘Mining and quarrying’ with just 20 high-growth enterprises, and ‘Water supply, sewerage, waste management, and remediation activities’ with 79, displayed limited growth dynamics of gazelles. This likely stems from higher barriers to entry, which involve substantial capital requirements and regulatory challenges inherent in these mature and specialised industries.
Enterprises and innovation
Innovation is a critical driver for enterprises seeking to gain a competitive advantage in today’s dynamic market landscape. The ability to innovate enhances businesses’ adaptability and growth potential. The Community Innovation Survey (CIS) reports about enterprises with 10 or more employees.
_08-07-2025.png)
Source: Eurostat (inn_cis13_bas)
When exploring the life cycle of young enterprises and the factors contributing to their success, it is important to recognise that some young enterprises gain a head start by being part of an enterprise group. This might provide them with easier access to capital, knowledge, and organisational support.
Figure 8 presents 2022 data from the CIS. There were 18 EU countries that reported voluntarily on the group status of enterprises, revealing a distinct difference in innovation activities between young enterprises that are part of an enterprise group and those operating independently. Among enterprises affiliated with an enterprise group, 68% are identified as innovation active, compared to only 45% of independent enterprises. This disparity highlights the advantages of being part of a group, including easier access to finance, knowledge transfer, and structured environments conducive to innovation. Some group-affiliated young enterprises serve as experimental hubs for larger organisations, exploring new technologies or business models with reduced financial exposure. Additionally, group membership often facilitates market access and stronger networks, essential for scaling innovative solutions. In contrast, independent enterprises might struggle with limited resources and higher operational pressures, prioritising immediate concerns over long-term innovation investments. Overall, the data illustrate that being part of an enterprise group offers fertile ground for innovation.
Due to their group affiliations, enterprises belonging to an enterprise group may not fit perfectly to the idea of an SME. However, they are a minority, as on average, 95.1% of SMEs operate independently of any enterprise group (see Table 1).
_08-07-2025.png)
Source: Eurostat (inn_cis13_bas_ip)
Similarly, Figure 9 covers all EU countries and further illustrates the importance of innovation in driving enterprise success, particularly how it correlates with turnover generation across different enterprise sizes. The dataset reflects figures from 2022 and indicates that 80% of turnover is generated by innovation-active businesses. This underscores the critical impact of business innovation on revenue generation, and vice versa.
There is a progression: as businesses scale, so does their capacity to invest in and benefit from innovation. With greater resources and R&D expenditure, bigger firms are strategically better positioned to prioritise innovation, and effectively translate it into turnover. The share of turnover coming from innovation-active firms was
- 54% in small enterprises (those with 10 to 49 employees),
- 70% in medium-sized enterprises (50 to 249 employees),
- 89% in the largest enterprises (250 or more employees).
_v_2_.png)
Source: Eurostat (inn_cis13_yreg)
Figure 10 provides another perspective on innovation activities based on the age of businesses. In 2022, enterprises established in 2013 or earlier showed a balanced approach to innovation, with 51% identified as innovation active. Similarly, those founded between 2014 and 2017 maintained the same proportion, while for enterprises established between 2018 and 2019, or in 2020 and after, there was only a slight decline. Overall, the data across various age classes reveal only minor differences in innovation engagement, suggesting that while newer businesses face unique challenges, the role of innovation remains significant across all enterprise ages.
Source data for tables and graphs
Data sources
Eurostat's Business demography statistics (BD) provide information on the dynamics of the business economy. They capture how the composition of the enterprise population changes over time. They also show how the economic contribution of the business economy in terms of employment develops across a number of enterprise characteristics. Business demography statistics cover, amongst other things, the birth, survival (followed up to 5 years after birth) and death of enterprises within the business population. They report changes in the stock of enterprises within the business economy from one year to the next, reflecting among other things the level of competition, entrepreneurial spirit and the business environment.
Business demography statistics reflect the employment dynamics within the business economy by measuring growth in terms of employment. European business demography statistics are compiled for 2 different enterprise populations:
- A) All enterprises, whether they have employees or not
- B) Only enterprises that have employees.
This article focuses only on one option, i.e. on all enterprises, independent from the presence of employees.
Business demography data are also available at regional level. These statistics are becoming increasingly important as many economic phenomena in the single European market are present across national borders. Regional level business demography data show regional hot spots of innovation and technological development within the countries, or sometimes stretching across national borders. Furthermore, the regional concentration of selected activities as well as job creation can be traced from regional data for policy purposes. This article does not present any regional data.
Statistical business registers are the main source for BD statistics. Data come from the national statistical business registers in the EU, EFTA, and enlargement countries. In practice, most of these national statistical business registers are based on a combination of administrative and statistical sources.
The Community Innovation Survey (CIS) is designed to provide information on the innovativeness of business economy sectors, to enable the analysis of innovation drivers or barriers or to assess innovation outcomes. The survey focuses, among others, on the following aspects:
- product innovation (new to firm; new to the market)
- business process innovation
- innovation development
- innovation activities
- innovation expenditure
- turnover from innovative products
- incentives for the implementation of innovation
- innovation cooperation
- source of financing for innovation
- sources of information on innovation
- barriers to innovation
- others
The CIS provides various innovation indicators by 3 main breakdown variables: type of innovator, economic activity, and size class of enterprise.
Coverage, units and classifications Business demography covers the business economy, which includes industry, construction and many services ((NACE Rev.2)sections B to N, P to R as well as division S95 and S96). Business demography statistics do not cover agriculture, forestry and fishing, or public administration.
Starting with the reference year 2021, business demography statistics are compiled under the legal basis of the EU Regulation 2019/2152 on European business statistics and its implementing act, EU Regulation 2020/1197 on technical specifications and arrangements.
The information from the CIS covers the business sectors (B-C-D-E-46-H-J-K-71-72-73) for enterprises with 10 or more persons employed.
Context
Business demography is an important subject for policy-maker discussions about increasing the level of employment, since it is one of the main priorities of the EU growth strategy.
Enterprise demography reflects, to some degree, the dynamism of the EU economy through the adaptation of economic structures to changing market conditions. The potential contribution that enterprise creation can make to employment is also one of the most important aspects drawing the attention of policy makers to the subject of enterprise demography. In this context, enterprise creation can be seen as an indicator of competitiveness, as a factor of economic growth and as a vital means of creating jobs.
Business demography provides information for births, deaths and survival rates of enterprises, as well as information on related employment data. The 2 main measures used for employment are the number of persons employed and the number of employees.
The demography of the business population is represented by data on:
- the active population of enterprises;
- their birth;
- their survival (followed up to 5 years after birth);
- their death.
Particular attention is paid to the impact that these demographic events have on employment levels. Business demography data can be used to analyse the dynamics and innovation of different markets, such as:
- entrepreneurship in terms of the propensity to start a new business, such as analysed in the joint OECD/Eurostat Entrepreneurship Indicators Programme;
- how newly-born enterprises can contribute to the creation of jobs.
Footnotes
- Survived (young) enterprises by activity are compared with active enterprises in the reference year, however for survived enterprises activity is taken from the year of birth, but for active enterprises from the reference year. Data are analysed at section level; in practice it can be assumed that within 1 to 5 years activity would not change from one section to the other. ↑
Explore further
Other articles
- High-growth enterprises - statistics – background article on high-growth enterprises and young high-growth enterprises (gazelles)
- Structural business statistics overview - see chapter "Business demography"
- Structural business statistics (SBS) - theme entry page
- Structural business statistics at regional level see chapter 'Enterprise demography: births, deaths and survival'
- Quarterly registrations of new businesses and declarations of bankruptcies - statistics
Database
Thematic section
Publications
- Recent Eurostat publications on BD
- European business statistics methodological manual for business demography statistics – 2025 edition
- News Release BD2022 final data
- Recent Eurostat publications on SBS
- Key figures on Europe – 2024 edition – see subchapter on Business
- Eurostat’s Regional Yearbook – see chapter 8. Business
- News Release SBS – 2022 final data