Small and medium-sized enterprises (SMEs) - Structural business statistics

Small and medium-sized enterprises (SMEs)

Small and medium-sized enterprises (SMEs) are often referred to as the backbone of the European economy, providing a potential source for jobs and economic growth.

SMEs are defined by the European Commission as having less than 250 persons employed. They should also have an annual turnover of up to EUR 50 million, or a balance sheet total of no more than EUR 43 million (Commission Recommendation of 6 May 2003). These definitions are important when assessing which enterprises may benefit from EU funding programmes aimed at promoting SMEs, as well as in relation to certain policies such as SME-specific competition rules. European Commission policy in relation to SMEs is mainly concentrated in five priority areas, covering:

  • the promotion of entrepreneurship and skills;
  • the improvement of SMEs' access to markets;
  • cutting red tape;
  • the improvement of SMEs' growth potential, and;
  • strengthening dialogue and consultation with SME stakeholders.

Data collection

Annual structural business statistics with a breakdown by size-class are the main source of data for an analysis of SMEs. A limited set of the standard SBS variables (number of enterprises, turnover, persons employed, value added, etc.) is available mostly down to the 3-digit (group) level of the activity classification (NACE), based on criteria that relate to the number of persons employed in each enterprise. The number of size-classes available varies according to the activity under consideration. However, the main classes used for presenting the results are:

  • micro enterprises: with less than 10 persons employed;
  • small enterprises: with 10-49 persons employed;
  • medium-sized enterprises: with 50-249 persons employed;
  • small and medium sized enterprises (SMEs): with 1-249 persons employed;
  • large enterprises: with 250 or more persons employed.

Coverage of economic activities and legal forms

The economic activities covered with business demography indicators are NACE Rev 2 sections B to N, excluding group 64.2 (management activities of holding companies), and voluntarily sections P to S.

Thus, activities relating to industry, construction, distributive trades and services are covered, but agriculture, public administration, non-market activities of households, and extra-territorial agencies are not.

At present, indicators include market producers and exclude units in the central and local government sectors.