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 countries and other partner countries. It consists of two parts: an annual report on European SMEs and SBA country fact sheets.
Brussels, 24 November 2016 - The 2015/2016 annual report on European SMEs is now available. It presents good news: SME recovery continues.
The annual report, prepared on a yearly basis, provides a synopsis of the size, structure and importance of SMEs to the European economy and an overview of the past and forecasted performance of SMEs from 2008 to 2017. Comparisons with partner countries outside the EU and with the large enterprise sector are also included.
The SBA fact sheets present an assessment of the progress in the implementation of the Small Business Act at national level. They focus on key performance indicators and national policy developments related to the SBA's 10 policy dimensions in the 28 EU countries, Albania, the former Yugoslav Republic of Macedonia, Iceland, Montenegro, Serbia, Turkey and Moldova.
Click on a country on the map to see the fact sheet for the selected country.
Past and future SME performance: SME employment grew by 15 % during 2012-14. However, despite this employment growth, value added has dropped by 3 %, due to the poor performance of small firms which experienced a 13 % drop in value added. The expected improvements in investments, net exports and consumer spending should contribute to growth in real GDP, which is forecast to grow strongly, by 7 % during 2015-17. SMEs are expected to play a key role in this overall economic growth.
Implementing the Small Business Act for Europe (SBA): The SBA profile of Albania is inconclusive, as many data are not available. Overall results thus need to be interpreted with caution. That said, Albania has in recent years put in place some core components of the SBA, including a one-stop shop for online start-up procedures and an e-procurement portal. The Business Investment and Development Strategy for 2014-2020, adopted in spring 2014, needs to be systemically implemented.
SME policy priorities: A number of key components of SME-friendly business environment are missing and need to be established, such as fostering the entrepreneurship in the educational curricula, setting up regulatory impact assessment procedures, developing alternative sources of finance beyond the traditional bank lending, and creating fast-track and specific bankruptcy procedures for SMEs, especially in view of the issue of the non-performing loans.
Past and future SME performance: Austria´s SME sector was one of the most resilient during the recent crisis. In 2010-2015, SME value added increased at an average rate of 3 % annually, 16 % in total. SME employment rose more moderately, by 7 % in total, resulting in a net job growth of more than 122 000. All these jobs were created in services sectors, while the manufacturing sector lost almost 2 000 jobs. In 2013-2015, the SME expansion lost some of its momentum. However, from 2016 onwards, SME growth is expected to continue, with SME value added forecast to rise by 7 % and SME employment to increase by 3 % in 2015-2017. This will result in an estimated 55 000 additional SME jobs. The service sector will account almost exclusively for this job growth, most notably professional, technical and scientific services as well as tourism-related accommodation and food services.
Implementing the Small Business Act for Europe (SBA): Austria shows an overall competitive SBA profile with above-EU-average performances in four SBA areas: Internationalisation, Environment, Skills & innovation and Single market. In six of the SBA areas, Austria´s performance has improved since 2008. Only in ‘Responsive administration’, Access to finance and Skills & innovation have conditions deteriorated since 2008. This is a major concern given their crucial importance for SMEs’ competitiveness. In 2015, policy emphasis has been on the principles of ‘Second chance’, Access to finance and Internationalisation.
SME policy priorities: The three areas showing deterioration in performance since 2008 have to be in the policy focus. In ‘Responsive administration’, the steps initiated to facilitate licensing procedures need to be continued and start-up conditions, especially for limited liability firms, need to be eased further. In Access to finance, the measures promoting start-up financing need to be further reinforced. Finally, the stagnating innovation performance of SMEs needs to be subjected to a serious review.
Past and future SME performance: Belgian SMEs have performed strongly since 2008. Value added has increased by over a fifth and employment has grown by more than a tenth. A large proportion of this growth was due to the achievements of micro firms, whose value added and employment grew by 25 % and 23 % respectively. In 2015-2016, SME value added is expected to grow by 3 %. Employment is forecast to grow only slightly less, at 2 %. In 2016-2017, growth will accelerate, with SME value added predicted to increase by 5 % and SME employment expected to rise by 3 %. As a result, SME employment will grow by more than 80 000 in 2015-2017. A large proportion of the increase will be due to employment growth in micro firms.
Implementing the Small Business Act for Europe (SBA): Belgium’s SBA profile is well in line with the EU average. In the areas of Skills & innovation, Single market and Access to finance the country is performing above the EU average, while Entrepreneurship, ‘Responsive administration’ and State aid & public procurement remain below the EU average. The areas that saw the most significant progress in 2015 were Entrepreneurship, Access to finance and Skills & innovation. Since 2008, the areas entrepreneurship, State aid & public procurement, and Single market have shown most progress, while in ‘Second chance’, Access to finance, and Skills & innovation the progress was less discernible.
SME policy priorities: Elements supporting the ‘Think Small First’ principle should be further reinforced and consolidated. The existing SME test was due to be improved and evaluated in 2015; this should take place as soon as possible. Impact assessments should be applied in all regions. In the area of public procurement, the following issues should be considered: procurement capabilities at regional and local level should be strengthened; SMEs’ participation should be encouraged; and measures to mitigate risks of late payment should be adopted. Concerning Access to finance, measures to further encourage SMEs’ access to Structural Funds should be put in place.
Past and future SME performance: SMEs provide more than three quarters of employment and account for 66 % of value added, i.e. above the EU average of two thirds and 57 %, respectively. The manufacturing, wholesale and retail trade sectors generate half of SME value added. In 2012-2015, new business registrations fell. This downward trend in registrations was accompanied by low investments. SME employment fell by 5 % in 2008-2015 and has not yet recovered from the crisis. However, in 2015-2017, 9 % growth is forecast in SME value added and 2 % growth in SME employment, resulting in approximately 36 000 new jobs.
Implementing the Small Business Act for Europe (SBA): Bulgaria’s SBA profile is relatively weak, as the overall scores on almost all SBA principles are below the EU average. The only exceptions are ‘Second chance’ and Access to finance, which are both in line with the EU average. Since 2008, progress has been made mainly in Access to finance, ‘Responsive administration’ and Skills & innovation. However, in terms of implementing the SBA, much remains to be done.
SME policy priorities: The ambitious measures adopted under the strategies of public administration, e-government and public procurement need to be systematically applied, as so far they have had only a limited impact due to their slow and fragmented implementation. The capacity of the contracting authorities and the Public Procurement Agency need to be strengthened in order to improve the tendering procedures and develop appropriate guidance and standardised documents. The legal framework needs to become more predictable and stable, including by consistent application of the regulatory impact assessment and ‘SME test’. The insolvency framework needs to be reformed to accelerate recovery and resolution procedures and improve their effectiveness and transparency.
Past and future SME performance: Croatian SMEs are still recovering from the financial crisis. In 2015, SME value added and employment were 21 % and 11 % lower, respectively, than their 2008 values. Thus, in Croatian SMEs there were still about 84 000 jobs less in 2015 than it was the case in 2008. The SME outlook for the period 2015-2017 is positive: value added is expected to increase by 6 %, while employment is predicted to grow by 3 %, thus creating 24 000 new jobs. The forecast is particularly encouraging for micro-enterprises, with predicted increases of 11 % and 7 %, respectively, in value added and employment.
Implementing the Small Business Act for Europe (SBA): The SBA profile of Croatia continues to be relatively weak. Croatia scores below or in line with the EU average in most of the SBA areas. Entrepreneurship is particularly weak, while the public procurement stands out with the score well above the EU average. Recently, progress has been mostly made in the area of ‘Responsive administration’, but much needs to be done for Croatia to become an SME-friendly business environment.
SME policy priorities: Despite gradual improvements in the ‘Think Small First’ principle, Croatia has yet to put some of its fundamental elements in place. Most importantly, a comprehensive ‘SME test’ needs to be introduced. Administrative burden has to be reduced significantly. Unjustified restrictions, hampering access to and the practice of regulated professions need to be removed. Efficiency of public administration is to be increased, and regulatory instability reduced. Strengthening entrepreneurial education at all levels is also a priority. Furthermore, diversification of financial sources for SMEs is needed, such as of venture capital.
Past and future SME performance: In 2010-2015, SME value added fell by 23 % and by 32 % in micro firms. SME employment in the ‘non-financial business economy’ dropped by 13 %. The manufacturing sector performed particularly badly in value added and employment; they fell respectively 31 % and 19 % due to high labour and energy costs and low productivity. In the meantime the information and communication and accommodation and food services sectors generated value added growth respectively of 30 % and 12 %, mainly due to greater use of ICT products by consumers and businesses in recent years and rising investment in the tourism industry. In 2016-2017 value added growth is forecast to increase around 6 %. SME employment growth is expected to be more moderate: approximately 2 % in 2015-2016, and roughly 3 % in 2016-2017. Overall, SME employment is predicted to increase by more than 9 000 jobs in 2015-2017.
Implementing the Small Business Act for Europe (SBA): The SBA profile in Cyprus is in line with the EU average in almost all areas. The country scores below the EU average in Access to finance and internationalisation, while in environment it performs above it. The main progress in the last years was achieved under ‘Second chance’, State aid & public procurement and Single market, while the areas of Internationalisation and Environment have not experienced substantial progress since 2008.
SME policy priorities: In Cyprus, there is a lack of effective schemes to make SMEs more competitive and promote the restructuring of smaller firms. The support mechanism remains fragmented across several ministries and organisations, while enterprise policies tend to favour large businesses. There is a widespread call for guarantee schemes, tax incentives and equity injections that should be addressed to smaller companies, especially the family-run micro enterprises. Lack of skilled human resources and an underdeveloped capital market are the main barriers to internationalisation. Essential measures to be taken are a rapid implementation of the ‘SME test’ and further reduction of administrative procedures and bureaucracy.
Past and future SME performance: In 2015 the number of SMEs grew by 1 % from the previous year, representing approximately 10 000 companies. Czech SMEs started increasing their output while keeping employment roughly stable. Both parameters remained below their pre-crisis levels though. The SME value added in 2015 grew by 6 % from the previous year, reaching 97 % of its 2008 level. SME employment increased slightly from 97 % to 98 % of its 2008 level (with 26 000 new jobs in absolute terms). The outlook for the next two years is mixed. SME value added is expected to grow by 4 % p.a., while employment is forecast to remain stable.
Implementing the Small Business Act for Europe (SBA): The Czech Republic’s SBA profile shows mixed results. The country’s strengths include State aid & public procurement and Environment. Notably, the result for public procurement is significantly influenced by a single indicator, measuring the participation of SMEs in public tenders. At the same time, the European Semester process has identified further quality enhancements to the public procurement process as necessary. Average scores were recorded in the areas of Entrepreneurship, ‘Second chance’, Access to finance, Single market, and Skills & innovation. The performance in ‘Responsive administration’ and internationalisation was below average. Since 2008 the country has made moderate progress implementing the Small Business Act. Policy measures put in place have addressed all SBA areas, although a number of individual SBA recommendations have yet to be implemented. The fastest progressing areas include State aid & public procurement, ‘Second chance’, Single market and ‘Responsive administration’. Significant policy efforts went to better anchor the ‘Think Small First’ principle in the policy-making process. Performance in the areas of Entrepreneurship, Skills & innovation, and Internationalisation actually deteriorated compared to 2008.
SME policy priorities: Challenges remain unchanged from the previous year. It is necessary to raise the profile and public appeal of Entrepreneurship. The application of the ‘Think Small First’ principle needs to be strengthened, in particular by systematically applying the SME test to new legislative proposals. Developing e-government solutions is extremely important to create a more favourable business environment and public administration needs to be made more responsive to SMEs’ needs. Last but not least, international trade, both in the Single market and with non-EU countries, appears to be the area where short-term gains should be the easiest to accomplish.
Past and future SME performance: Danish SMEs have grown since 2010, in terms both of value added and employment. However, in 2015 employment was still 5 % below its pre-crisis level of 2008. The number of newly registered firms has increased significantly in recent years, by nearly 50 % from 2013 to 2014 and by an estimated 30 % from 2014 to 2015. The SME outlook for 2016-2017 is positive as well. SME value added is forecast to rise by 10 % between 2015 and 2017, and SME employment by 4 %, thus creating about 40 000 new jobs.
Implementing the Small Business Act for Europe (SBA): Denmark’s SBA profile is very strong and the country continues to provide a sound business environment for SMEs. Since 2008, a number of policy measures benefiting SMEs have been adopted. Recent measures have focused on ‘Think Small First’, Access to finance and State aid & public procurement. Regarding the former, progress was mainly driven by the new Public Procurement Act, which includes more flexible rules for SMEs and makes it easier for them to participate in public tenders.
SME policy priorities: Although Denmark has significantly reduced the administrative burdens and costs for SMEs, some regulatory obstacles persist, notably in construction and retail trade. As regards ‘second chance’, the insolvency framework works well, but it is not easy to re-start a business, as it may take several years to get discharged from bankruptcy. Access to finance, still easier for Danish SMEs than for their EU counterparts, remains challenging. Efforts to improve the mobility of R&D personnel between university and the private business sector could be further strengthened. Effective implementation of the Public Procurement Act by the municipalities, notably of the elements that favour SMEs, is also a priority.
Past and future SME performance: SMEs in the ‘non-financial business economy’ have experienced healthy growth. Between 2010-2015, SME value added rose by 46 %, while employment increased by 14 %. At the beginning of 2016, a total of 201 348 companies were registered. Overall, there was a net growth of 9 295 registered companies. The total number of registered companies grew by approximately 5 % per year over the past 3 years. The number of new registrations in the same period was fairly stable, at around 19 000 per year. The outlook for the SME sector is mixed. While SME value added is expected to grow by 4 % in both 2016 and 2017, SME employment is projected to decline by approximately 1 % over the next two years.
Implementing the Small Business Act for Europe (SBA): Estonia’s SBA profile belongs to the best in the EU. It is the best performer in the principles ‘Responsive administration’ and Access to finance. In Entrepreneurship, Single market and Environment, it scores above the EU average. The remaining principles stand within the range of the EU average. Compared with last year, the country has improved largely in Entrepreneurship.
SME policy priorities: In the area of Skills & innovation, specific training in ICT should be extended to SMEs in non-technological sectors to help them improving in e-commerce. In general, participation in vocational education and training should be increased according to labour market relevance. Private investment in research, development and innovation, including broader cooperation between universities and companies should be fostered. In the area of ’Think Small First’, the SME test should be adopted and fully implemented. The ‘Second chance’ principle needs reducing the length of bankruptcy procedures and accelerating discharges. In the area of Single market, available services should be better promoted to SMEs.
Past and future SME performance: SMEs in Finland experienced a solid recovery in 2010-2015. During this period, SME added value and employment rose by 12 % and 6 %, respectively. In 2015, SMEs were estimated to have exceeded their pre-crisis levels of 2008 in both areas. They recovered better from the crisis than large firms did. Their recovery was particularly driven by the service industries, most notably those linked to ICT. The SME sector´s expansion is set to continue in 2015-2017, albeit at a more moderate pace. SME employment is predicted to increase by 1 % net, or around 6000 jobs. Total SME added value is expected to increase more rapidly, by some 4 % over this period.
Implementing the Small Business Act for Europe (SBA): Finland has one of the most competitive SBA profiles in the EU. It surpasses the EU average in seven out of nine SBA principle areas. Only in State aid & public procurement and Internationalisation does it trail behind the EU average. One reason for concern, however, is that Finland has not significantly further improved its position in any of the SBA principle areas since 2008, with the exception of the Single market. There is, therefore, a genuine risk that Finland may lose its competitive advantage in the future. In terms of policy implementation, the areas that saw most significant progress were: ‘Second chance’, Skills & innovation and ‘Responsive administration’.
SME policy priorities: Finland has been very active in implementing SME-supportive policies in all SBA areas since 2008. The remaining problems are confined to a small number of specific areas. In public procurement, more efforts are needed to reduce the size of lots and of the time it takes to review proceedings in the courts. SME access to credit support instruments needs to be further improved. Start-up conditions should be improved and brought in line with the SBA goals, and administrative burden should be further reduced. The existing support mechanisms in the area of innovation need to be reviewed so that they yield more tangible results.
Past and future SME performance: SMEs in France are recovering from the crisis. Their labour productivity is 27 % higher than the EU average. Between 2010 and 2015, the added value of French SMEs increased by 4 %. Employment increased only in microcompanies, by 2 %, while in small companies it fell by 1 % and in medium-sized companies by 4 %. Overall, SME employment stagnated during this period. In 2015, the number of business registrations fell by 3 % compared to 2014. The number of bankruptcies increased by 1 %. From 2016 onwards, the current moderate growth in SME added value and employment is expected to accelerate. Between 2015 and 2017, added value is forecast to increase by 7 % and employment by 3 %. This corresponds to the creation of 281 000 jobs in SMEs within two years.
Implementing the Small Business Act for Europe (SBA): France’s SBA profile is balanced, with performance in most of the SBA areas broadly in line with the EU average. Good framework conditions are in place, in particular for SME participation in public procurement. French policy-makers have been increasingly more attentive to SME policy, with the most significant progress made in recent years in the area of Access to finance. The ‘Industry for the Future’ programme, the tax incentives encouraging companies to invest and the incentives to recruit have benefited French SMEs. A large number of measures aim to simplify administrative tasks for SMEs.
SME policy priorities: Regulatory burden and legislative instability continue to be causes for concern. A stable legal environment is crucial for French SMEs. The focus needs to be on a smaller number of changes, prioritising those that simplify matters a lot, including at the level of state agencies and at local and regional levels. Remaining barriers that recent or ongoing reforms do not sufficiently address, in particular regarding business services and regulated professions, need to be removed. A comprehensive, widespread ‘SME test’ for the assessment of the impact of new legislation on businesses remains to be introduced. The links between the education sector and the labour market need to be tightened. Innovation policy schemes could be simplified and made more efficient.
Past and future SME performance: SMEs in the former Yugoslav Republic of Macedonia account for almost two thirds of total value added and nearly three quarters of all jobs, well above the respective EU averages of 58 % and 67 %. In 2008-14, SME value added increased by 7 %, while employment grew by 13 %. Real GDP is projected to grow by about 3.5% annually during 2016 and 2017. Whether this expansion will be led by economic productivity or stem from increased employment is unclear. The main challenge for SMEs will be to initiate catching up with European productivity levels.
Implementing the Small Business Act for Europe (SBA): The SBA profile of the former Yugoslav Republic of Macedonia provides a mixed picture. While the principles of 'second chance' and 'responsive administration' score above the EU average, access to finance, environment, and skills & innovation trail behind the EU average. Limitations in availability of data need to be taken into account while interpreting the overall results. Recently, significant progress has been made in the areas of ‘responsive administration’, entrepreneurship and access to finance.
SME policy priorities: Micro and small enterprises face problems with regular access to finance. Alternative non-banking financing needs to be developed. The basic business skills are a major bottleneck for most SMEs, affecting their potential for growth in productivity and competitiveness and, consequently, in new employment. Enhancing innovation, including through strengthening innovation skills and investing in ICT training, should also play an important role. A comprehensive 'SME test' needs to be set up and administrative burden further decreased. This requires improvements in coordination among the public policy entities as well as strengthened dialogue with the SME stakeholders.
Past and future SME performance: Germany boasts one of the most vibrant SME sectors in the EU. The number of people employed in SMEs stood at almost 17.1 million in 2015, up 9 % over the last five years and 22 % since 2008. Total SME value added increased by 18 % between 2010 and 2015. The continuing SME employment growth is the cornerstone of Germany’s positive labour market situation. Expectations for the foreseeable future remain good. It is estimated that SMEs of all size classes will create almost one million new jobs in 2016 and 2017, with medium-sized firms creating 3.6 % new jobs per year, small companies 2.4 % and microfirms 2.6 %.
Implementing the Small Business Act for Europe (SBA): Germany has a solid SBA profile. Skills & innovation and ‘Second chance’ stand out as the policy areas where Germany outperforms the EU. By contrast, on ‘Responsive administration’ and Entrepreneurship, Germany trails the EU average. Despite considerable policy efforts by Germany since 2008, other countries have been improving faster than it. The vast majority of SBA recommendations have been implemented, even in the absence of a dedicated strategy to apply the SBA. Since 2008, SME-related policy has been given a new impetus, especially in the light of SBA principles on Skills & innovation and Internationalisation. A lot of policy measures benefiting SMEs have also been recently adopted in the area of ‘Responsive administration’.
SME policy priorities: The emergence of a more dynamic start-up market is one of the most pressing issues for Germany. The creation of more entrepreneurship support programmes for specific groups (e.g. migrants, female entrepreneurs and young people) should be further encouraged to fully exploit the country’s untapped entrepreneurial potential. Additional steps to preserve Germany’s innovative edge should be a priority, in particular by achieving more widespread integration of innovative ITC technologies in SME business models.
Past and future SME performance: SMEs have still not recovered from the financial crisis. In 2015, added value was 35 % below its 2008 value and employment 23 % below its 2008 value. Most recently, however, the recession has turned into stagnation. Added value remained roughly constant in 2014 and 2015. For SME employment, the negative trend ended in 2015. The outlook for 2016-2017 is modest, with limited signs of a near-term recovery. SME employment and added value are expected to remain unchanged from 2015 to 2017. Micro firms are predicted to perform the worst, with a fall in added value of 2 % and stagnating employment. The added value and employment of medium-sized companies, however, are expected to increase moderately at rates of 2 % and 3 %.
Implementing the Small Business Act for Europe (SBA): Greece´s SBA profile reflects the difficult business environment most SMEs find themselves in. In six out of nine SBA areas Greece lags behind the EU average, sometimes by a considerable margin. Taking into account the recent completion of the procedure for the re-capitalisation of Greek banks, as well as the capital control measures, the situation is most problematic in access to finance. Together with environment, the area is also the one where conditions have deteriorated the most since 2008. On the up side, there are two areas where Greece’s performance is in line with the EU average — entrepreneurship and ‘second chance’. State aid & public procurement is the only area where Greece’s performance is above the EU average. It is also encouraging that in four SBA areas the situation since 2008 has improved and Greece is catching up with the rest of the EU.
SME policy priorities: Access to finance should be considered a priority, including guarantees and other systems facilitating access to credit and access to alternative sources of financing, such as private equity and venture capital. Regulatory impact assessments, the ‘SME test’ and consultations with SME stakeholders need to be introduced systematically. Also, a coherent entrepreneurship support strategy still needs to be implemented. Insolvency procedures need to be shortened and prevention measures such as helpdesks, early warning systems and mentoring need to be put in place. More efforts should be deployed to help Greek enterprises export and promote national products.
Past and future SME performance: Hungary´s SME sector, especially in terms of employment, plays a more important role in the domestic economy than is the case in most other Member States. However, the sector has only partially recovered from the crisis. Although total SME employment stagnated in 2010-2015, SME value added grew by 11 %. As a result, SMEs almost fully returned to their pre-crisis level of value added in 2015. At the same time, SME employment was still 7 % below its 2008 level. From 2016 onwards, SMEs are expected to continue their uneven development of recent years. In 2016-2017, SME value added is predicted to rise by 4 %, while SME employment is expected to fall by 2 %.
Implementing the Small Business Act for Europe (SBA): Hungary’s SBA profile contains many weaknesses. In five of the SBA principle areas — Entrepreneurship, 'Second chance', ‘Responsive administration’, Skills & innovation and Environment — the country trails the EU average. State aid & public procurement, Access to finance, Single market and Internationalisation are the areas where Hungary is on a par with the EU in general. The changes as compared to last year have been limited. Since 2008, the most significant catch-up vis-à-vis the EU as a whole has been achieved in the ‘Responsive administration’, Access to finance, State aid & public procurement areas and environment. During 2015, major policy developments were made in the field of Entrepreneurship, Access to finance and Skills & innovation.
SME policy priorities: Despite significant progress, administrative burden, especially as regards taxes, is still a considerable challenge. Conditions allowing SMEs to take part in fair public procurement competitions have to be improved further. The use of regulatory impact assessments (RIAs) has to be broadened. Consultations with SME stakeholders on regulatory changes are not always effective and transparent. Insolvency procedures have to be strengthened and made cheaper to facilitate 'Second chance' and Entrepreneurship. Loan financing is still a bottleneck for many SMEs. Finally, although measures have been implemented to improve Hungarian SMEs’ participation in EU research projects, further efforts need to be made to increase their innovation capacity and activity, and to leverage on eco-innovation and green technologies as a means to boost SME competitiveness.
Past and future SME performance: SMEs are important drivers of the ‘non-financial business economy’ in Iceland. In 2014, SMEs accounted for more than two thirds of value added and almost three quarters of employment, substantially more than the respective shares in the EU. Average productivity of Icelandic SMEs was well above the EU average (EUR 57 000 annually per person against EUR 42 000). Since an economic turnaround in 2011, following the dramatic banking collapse of 2008, the Icelandic economy has been steadily recovering. From 2010-2014, SME value added and SME employment grew substantially, especially in the administrative and support service activities sector, even though they remain at lower levels than before the crisis. The positive development has also been reflected in business demography, with the number of business registrations increasing and insolvencies decreasing.
Implementing the SBA: Iceland has a strong SBA performance profile. As the country is not an EU Member State, statistical updates are performed at irregular intervals. Therefore, limitations in availability of data need to be taken into account when interpreting the overall results. Iceland's SBA profile shows a performance above the EU average in almost all SBA areas for which an update is available: entrepreneurship, 'second chance', 'responsive administration', access to finance and skills & innovation, and this despite the lack of an official national strategy for the SBA implementation. Since 2008, performance in environment has improved strongly while in 'responsive administration' and in skills & innovation, a slight downward trend is noted.
SME policy priorities: The business environment is favourable to SMEs, although a comprehensive policy strategy specifically addressing SMEs is still lacking. Despite recent progress, further simplification and streamlining of taxes could be pursued to reduce the time required to pay taxes. Access to finance could be improved by developing alternative sources and by completing the process of removing capital controls.
Past and future SME performance: The strong recovery in Ireland´s SME sector continued in 2015. Total SME added value is estimated to have increased by more than 18 %. At the same time, the number of SMEs is estimated to have increased by 5 % and SME employment by more than 3 %, adding more than 27 000 additional jobs to the economy. Since the crisis reached its lowest point in 2015, SME added value increased by 31 % and SME employment by 14 %. Micro firms performed particularly well. In the larger economic sectors, SMEs in the information and communication sector expanded the fastest. The recovery is expected to continue in 2016 and 2017. SME employment is forecast to rise by 5 % between 2015 and 2017, creating approximately 43000 new jobs. SME added value is expected to increase by 14 %. However, although total SME added value has surpassed pre-crisis levels, for SME employment this is only expected after 2017.
Implementing the Small Business Act for Europe (SBA): Ireland maintained its competitive SBA profile as compared to last year´s analysis. In five SBA areas — Entrepreneurship, 'Second chance’, 'Responsive administration’, Single market and Skills & innovation — it performs well above the EU average. In the latter two, it even features among the top three performers in the EU. In three other SBA areas Ireland performs on a par with the EU average. Since 2008, Ireland has improved its performance in all but one SBA area — 'Second chance’. This progress was fuelled by the country’s proactive approach to implementing the SBA. Improving SMEs’ Access to finance and competitiveness and increasing new business and job creation through enhancing Entrepreneurship are some of the key priorities that have directed policy-making in Ireland in recent years.
SME policy priorities: Ireland introduced many measures to improve business conditions for SMEs, but significant challenges remain. The country does not yet have a national strategy to embed entrepreneurial education within the national curriculum for students of all ages. A systematic SME test and common commencement dates have yet to be implemented. Access to credit has to be further improved. The costs of enforcing contracts, including those related to legal remedies in the context of public procurement, remain high. Although progress on the take-up of information and communication technologies (ICT) in recent years has been impressive, Irish SMEs’ lack of progress on innovation should be monitored. More strategic cooperation with foreign multinationals and universities would boost innovation and therefore help counter this negative trend.
Past and future SME performance: The Italian ‘non-financial business economy’ has still not fully recovered its pre-crisis levels. In 2010-2015, the total value added of SMEs fell by less than 2 %. Concurrently, SME employment fell by more than 7 % compared to a drop in general employment of around 6 %. It is expected that 2016 and 2017 will remain at the current economic level with SMEs generating about the same value added as in 2015, but with slightly regressing job figures.
Implementing the Small Business Act for Europe (SBA): Italy’s SBA profile is weaker than that of most other EU countries. Only in Internationalisation does the country score above and in Skills & innovation in line with the EU average. In all other SBA domains Italy scores below the EU average. On the positive side, since 2008, the country has made progress in the areas of Single market, ‘Responsive administration’, Internationalisation and Skills & innovation.
SME policy priorities: To lift the administrative burden from SMEs, the reform of the public administration should be continued, with particular focus on the management of human resources as well as on local public enterprises and services. In ‘Second chance’, the framework for insolvency and debt collection should be further improved. The country has made consistent efforts to solve the historical problem of its public administration’s payment behaviour. Improvements were noted; however, the average payment period remains among the longest in the EU. Therefore, additional measures need to be taken in a stricter and more consistent way. Continuity of policies in support of SMEs’ innovation and Internationalisation should be ensured.
Past and future SME performance: After a deep crisis, Latvia’s SMEs are recovering. During 2010 – 2015, SMEs in the ‘non-financial business economy’ have experienced healthy growth: value added increased by over 45 % and employment by 16 %. At the same time, both values still remain below their 2008 level, by 1 % and 8 % respectively. The information and communication sector performed particularly strongly in 2010-15, with employment growth of approximately 50 %. SME value added rose even more rapidly, by more than 80 %. The outlook for SMEs is positive: SME value added is expected to grow by 7 % in 2016 and by 8 % in 2017, while employment is expected to increase by 3 % in both years, corresponding to a net job increase of 30 000.
Implementing the Small Business Act for Europe (SBA): Latvia has a very competitive SBA profile. The country outperforms other EU Member State in the principle Entrepreneurship and in State aid & public procurement. It scores above the EU average in the principles ‘Second chance’, ‘Responsive administration’, Access to finance and Environment. Average results are found in Single market and Internationalisation. The only weak performance occurs in Skills & innovation. Since 2008, most principles show a positive or stable trend, while only the scores on Environment have been deteriorating. Overall, the SME stakeholders acknowledge that the progress in implementing the SBA has been limited. Most emphasis in policy actions in 2015 was put in Skills & innovation and Access to finance. Furthermore, a number of support programmes for promoting the development of the SMEs’ competences in the research and innovation field were adopted, but there is still a lot of room for improvement.
SME policy priorities: Even though the area of Skills & innovation saw important policy activity, it remains the weak spot of Latvia’s overall SBA performance. The main challenge is to pursue a policy which incentivises the transition to higher value-added production, services and more innovation. Improvement in vocational education is necessary as well as more incentives to support private investment in innovation. On Internationalisation and Single market, the country should continue to support SMEs to enter new markets, in particular within the EU. On ‘second chance’, the insolvency regime is perceived as an obstacle to investment. More emphasis should be given to increase recovery rates and fraud control.
Past and future SME performance: In 2010-2015, SME value added increased by more than 50 % and SME employment increased by almost 20 %. As a result, SME value added in 2015 was 9 % above, but SME employment almost 7 % below its pre-crisis level in 2008. In 2015, 8 274 new SMEs were registered, a drop of 32 % from 2014, while 5 598 SMEs were removed from the register: an increase of 13 %. The outlook for SMEs is mixed. Value added is expected to grow by 5 % annually in 2015-2017. Employment is predicted to remain static and not to return to its pre-crisis level by 2017.
Implementing the Small Business Act for Europe (SBA): Overall, Lithuania’s SBA profile scores well. The country performs above the EU average in the principles Entrepreneurship, ‘Responsive administration’, State aid & public procurement and Environment, while it is in line with the EU average in Access to finance and Single market. Its results are below those of most of the EU countries in ‘Second chance’, Skills & innovation and Internationalisation. Since 2008, the largest improvements occurred in Entrepreneurship, Single market and Environment, while the results for ‘Second chance’ and Skills & innovation have been steadily deteriorating. In 2015 and the first quarter of 2016, Lithuania has adopted 16 policy measures addressing nine SBA principles, the most important and numerous ones in the fields of ‘Responsive administration’, Skills & innovation and Entrepreneurship.
SME policy priorities: In ‘Second chance’, more emphasis should be given to measures aiming to encourage honest entrepreneurs to re-start. In Skills & innovation, despite the efforts of the government, low innovation and lack of ICT skills remain the weakest points of SMEs. More investments in human capital are needed. Skills shortages should be addressed by more labour market relevant education. In addition, the uptake of new technology should be strengthened by a better coordination of innovation policies and alternative means of financing. In Single market and Internationalisation, the recent market shocks should be absorbed by facilitating market entries to other countries.
Past and future SME performance: Developments for Luxembourgish SMEs within the ‘non-financial business economy’ have been positive since 2010. Total SME value added rose with average growth rate of 5.7 % per year, while SME employment increased by over 9 % between 2010 and 2015. During this period, SMEs within the administrative and support service activities sector experienced particularly strong growth. SME value added was 58 % higher in 2015 than in 2010 and employment 14 % higher. Whereas in 2015, for the first time since 2012, the number of bankruptcies increased compared with the previous year (a 3.3 % rise), the overall outlook for SMEs is positive. Value added is expected to rise by 6.3 % per year in 2015-2017 and employment to rise by 2.1 % per year during the same period, thus creating 8.000 jobs.
Implementing the Small Business Act for Europe (SBA): The SBA profile of Luxembourg is well in line with the EU average in most areas. Particular strengths are in the areas of Environment and Internationalisation. Over the past years, most progress was made in these areas, as well as in ‘Responsive administration’ and Skills & innovation. Entrepreneurship and ‘Second chance’ remain behind the average EU performance. A recent positive development in the implementation of the SBA has been the publication of the 4th SME action plan in March 2016.
SME policy priorities: Luxembourg is lagging behind in terms of entrepreneurial culture and public image of entrepreneurs. Approving and implementing the long awaited bankruptcy law would bring important progress in the area of ‘Second chance’. Optimisation of the e-procurement tool would help more SMEs, also smaller ones, to reap the benefit of public expenditure.
Past and future SME performance: Malta remains one of the countries which have left the initial shock of the 2008-2009 financial crisis fully behind. During 2010-2015, total SME value added rose by more than 50 % and SME employment increased by 16 %, creating almost 15000 jobs. SMEs in the service industries, most notably in real estate, tourism and IT-related services, were the main drivers. The economic outlook for SMEs is bright. In 2015-2017, SME value added is predicted to grow by 13 %, while employment growth is expected to be 3 %, thus creating 3 500 new jobs. The highest growth rates are forecasted for micro firms.
Implementing the Small Business Act for Europe (SBA): Malta has a balanced SBA profile. In most areas it performs on a par with the EU average. Exceptions are Single market, where Malta outperforms the EU, and ‘Second chance’, where it lags behind the EU average. Since 2008, Malta has improved its performance in most SBA areas, especially in ‘Responsive administration’, Single market and Skills & innovation. For some time, Malta´s performance in State aid & public procurement was not among its strengths. However, recent policy initiatives to improve SME access to public tender and e-procurement helped to mitigate the situation.
SME policy priorities: A key challenge for the future remains the lengthy and not very effective insolvency regime. Other issues relate to the weak integration of information and communication technologies in SMEs' business operations, and the low participation rate in external trade, both within and outside the single market. As regards Responsive administration and particularly start-up conditions, there is also room for improvement. Malta, as a small Member State, needs to fully seize its potential to become an EU frontrunner in this area.
Past and future SME performance: In 2010-2014, SME value added increased by 13 %. Despite this significant increase, SMEs played a smaller role in the upswing of the Moldovan ‘non-financial business economy’, since value added as a whole rose by 32 %. Moreover, SMEs did not register employment growth. SME employment fell by 5 %, despite employment remaining at its 2010 level. The number of newly registered businesses fell to 5 985 in 2015, which was 278 less than the previous year, while de-registrations increased significantly, to a total of 3 905, compared with 2 770 in 2014. Following the 19 % real GDP growth in 2010-2015, real GDP is predicted to increase by 5 % in 2015-2017. Given this positive outlook, further growth in SME value added is expected.
Implementing the SBA: Moderate progress has been made in implementing the SBA. There are only three principles that can be evaluated on this year's SBA profile. On 'second chance' and internationalisation, Moldova performs below and on environment in line with the EU average. A specific strategy for the implementation of SBA principles has not yet been developed by the Moldovan authorities. However, the SMEs' Development Strategy 2012-2020 demonstrates the commitment to strengthen the development and growth in SMEs and is aligned to the SBA principles.
SME Policy priorities: Particular emphasis is required for the development of a comprehensive ’SME test'. Businesses are also still required to provide the same information multiple times to different governmental bodies. There are also significant gaps in ensuring a ‘second chance’ for honest entrepreneurs who failed. Mechanisms to coach entrepreneurs and a national campaign to limit the stigma of failure are needed. In terms of ‘responsive administration’, the most important deficit concerns the lack of a one-stop-shop structure. In addition, public procurement procedures and requirements should be friendlier to SMEs, and measures should be put in place for SMEs in the event of late payments. On access to finance, the government should find external financing sources to support SMEs' development. Lastly, there is a lack of an umbrella organisation supporting SMEs on internationalisation.
Past and future SME performance: Three quarters of value added and more than 82% of national employment is generated by SMEs, compared with an average of 57% and two thirds, respectively, for SMEs in the EU. SMEs are the main growth driver in Montenegro. Value added increased by 18 % in 2012-14, while employment rose by 13% in 2011-14. Growth was particularly strong in micro firms, where employment increased by 40 % in 2011-14. Real GDP is expected to grow by about 8% in 2015-17. Given that SMEs fully contributed to the recent economic upswing, further SME employment and value added growth can be expected.
Implementing the Small Business Act for Europe (SBA): The SBA profile of Montenegro continues to present a positive picture. Several principles score above the EU average, including entrepreneurship and 'second chance'. Performance on 'responsive administration' has improved, although it is below that achieved in the EU. Limitations in availability of data need to be taken into account while interpreting the overall results. During 2015 and the first quarter of 2016, entrepreneurship and skills & innovation were the areas in which the key new measures have been introduced.
SME policy priorities: Simplification of business-related legislation should be the main focus of SME policy makers. This includes streamlining of taxes in order to reduce the time it takes to pay taxes. Business transfers need to be enhanced, and cooperation between businesses and academia strengthened. Access to finance should be improved and alternative sources of financing need to be developed. The lack of resources allocated to support SME internationalisation also poses a challenge.
Past and future SME performance: In 2015, the Dutch SME sector continued its uneven recovery from the crisis. Extending the trend of the previous years, total SME value-added increased by a healthy 4.5 %, while SME employment grew by a much more moderate rate of 0.9 %. As a result, SME employment has yet to get back to its pre-crisis peak, while total SME value added was estimated to have surpassed that level by 9 % in 2015. The near future outlook is positive for SMEs. SME employment is expected to rise by 2 % in 2015-2017, creating around 62 000 new jobs. Growth of 7 % is predicted for SME value added, with the highest growth rates expected for medium-sized firms.
Implementing the Small Business Act for Europe (SBA): The Netherlands has a strong SBA profile. In two thirds of the SBA areas it ranks above the EU average. Particular strengths remain Entrepreneurship, 'Second chance' and 'Responsive administration'. In these areas the country is one of the top three EU frontrunners. It also performs well on trading, Single market and Internationalisation and also on Skills & innovation. Despite considerable policy efforts, there is still room for improvement on Access to finance and State aid & public procurement. Even though the Netherlands has not adopted a dedicated SBA strategy, it has made progress on a number of SBA pillars since 2008 and generally develops policies in accordance with the 10 SBA principles. During the reference period, most policy action was concentrated on ‘Think Small First’, Entrepreneurship and Access to finance.
SME policy priorities: Despite overall improvements, Access to finance remains difficult for Dutch SMEs and additional efforts are still required to make it easier for SMEs to access finance. Loan financing remains a specific challenge. Further actions are also needed on State aid and public procurement despite the government’s recent steps to address this issue. Despite targeted policy measures, SME participation in public procurement remains comparatively weak. There is also room for improvement on Skills & innovation, the use of ICT in SMEs’ trading activities and on the ICT skills training of SMEs’ employees. Finally, extra-EU trading by Dutch SMEs has stagnated in recent years, despite dedicated policy support. Further initiatives to boost SMEs’ extra-EU exports are needed.
Past and future SME performance: In 2015, value added by Poland’s SMEs for the first time exceeded its 2008 level. It is expected to stagnate in 2016 and start growing again at a rate of 5 % in 2017. Employment in SMEs remained 2 % lower than in 2008 and is expected to remain unchanged until 2017. Compared to the EU generally, Polish SMEs provide a significant contribution to employment — accounting for 69 % of persons employed in the ‘non-financial business economy’ — and a smaller contribution to value added — 52 %.
Implementing the Small Business Act for Europe (SBA): In 2015, conditions for small businesses in Poland varied from one SBA area to another. Access to finance was the policy priority for a number of years, and the country’s results were strongest there. Conditions were average in most SBA areas: ‘Responsive administration’, State aid & public procurement, Environment and Internationalisation. The main fields where performance needs to be improved were ‘Second chance’, Single market and Skills & innovation. Poland has recently introduced policy measures addressing ‘Second chance’ and Skills & innovation but the results are not yet reflected in statistics. The mechanisms for transposing EU law into national legislation need significant improvements to address the shortfall in performance related to the single market.
SME policy priorities: Skills & innovation, the application of the ‘Think Small First’ principle and ‘Second chance’ emerge as the key SME policy priorities. Some policy measures have now been put in place in these areas, but their results are yet to materialise. Strong support for the development of the knowledge-based economy and the culture change towards becoming more respectful of the needs of small businesses need to become the key features of the business environment. The impact assessment process is still weak and efforts to reduce administrative burden should be pursued. Special focus should be put on the effective transposition of EU law.
Past and future SME performance: Portuguese SMEs account for more than two thirds of total value added (compared with an average of 57 % in the EU) and nearly four out of five jobs (against two out of three jobs in the EU on average). Despite a more positive outlook since 2013, the recession period of 2008 continues to have an impact. SME employment in Portugal is recovering more slowly than value added and neither of these two indicators have yet reached pre-crisis levels. In 2015, SME employment and value added were still 18 % and 12 %, respectively, below pre-crisis levels. However, the registration of new businesses is growing. From 2016 onwards, the positive developments of recent years are expected to continue. The forecast includes a rise in SME value added of 3 % per year in 2015-2017. The outlook for SME employment is projected to be slight growth of close to 1 % per year, thus creating about 33 000 new jobs in 2015-2017.
Implementing the Small Business Act for Europe (SBA): Portugal’s SBA profile is solid and broadly in line with the EU average. Its score on Entrepreneurship is among the best in the EU, but on State aid & public procurement and Access to finance it continues to trail the EU average. Recent policy measures have focused on reorganising public administration services and reviewing legal systems, processes and procedures in order to reduce complexity and response times. Adding to the existing public funding available, several new funds were established to enhance creation, growth and internationalisation of SMEs.
SME policy priorities: Despite significant government efforts to improve the situation, alternative sources of funding, such as private equity, venture capital, crowdfunding and funding by business angels, remain marginal and quite underdeveloped. Late payments are still a serious problem for SMEs, particularly those aiming to participate in public procurement. Transparency and efficiency on public-private partnerships and concessions need to be increased, particularly at local and regional level. Although the ‘SME test’ has been adopted, it lacks methodology to make it effective and consistent across the administration. Licensing procedures need to be improved and accelerated. Further reducing regulatory barriers, especially in business services, is also essential to help SMEs grow.
Past and future SME performance: SMEs in Romania provide about two thirds of employment, slightly more than the EU average. They account for half of the value added, which is, however, about seven percentage points below the EU average. During 2010-2015, value added increased by 29 %, while employment rose by 6 %. The value added of Romanian SMEs is forecasted to grow by 8 % annually, while their employment is estimated to grow by 2 % in 2015-2017.
Implementing the Small Business Act for Europe (SBA): Overall, Romania’s SBA performance presents a mixed picture. Progress since 2008 is largely above the EU average, except in the areas of Internationalisation, Environment and Single market. Although a large number of policy measures were implemented, SME stakeholders consider that progress in implementing the SBA has been moderate.
SME policy priorities: Romania needs to continue the ongoing process of simplifying administrative procedures for businesses, to increase the transparency and efficiency of its public administration and to reform the public procurement system to address systemic deficiencies by fully implementing the national public procurement strategy and to implement the civil service strategy and reforms to strengthen inter-ministerial cooperation. A speedy resolution of insolvency, providing a better and easier re-start for entrepreneurs, would also benefit SMEs. Policy initiatives to improve the innovation potential of SMEs should also be put in place.
Past and future SME performance: SMEs have not yet recovered from the crisis. In 2014, employment and value added were still 10 % and 9 % below their respective pre-crisis levels in 2008. However, Serbia’s economy strengthened in 2015 and real GDP is expected to continue to grow by 2 % annually during 2015-17. SMEs are expected to contribute and benefit from this this economic upswing.
Implementing the Small Business Act for Europe (SBA): Serbia made some progress in implementing the SBA, e.g. as regards company registration and e-government services, in addressing SME training needs and in promoting innovation. Since 2008 every SBA area benefited from some kind of policy intervention. And yet, the achieved results imply that the effectiveness and efficiency of a number of these measures could be further improved. During the last year the government adopted a number of high-level strategies for the years 2015-2020, but the development of implementation action plans is still in the making.
SME policy priorities: Serbia needs to reduce administrative and legislative burden on SMEs. To this end the country should develop performance measurement for policy making activities and put more emphasis on implementing the 'think small first' principle. In particular the regulatory impact assessment and the SME test need to be systematically performed. Better access to finance is necessary to revitalise Serbian SMEs.
Past and future SME performance: The Slovakian SME sector is still struggling to exit crisis. It experienced an aggregate fall of 3 % in value added and stagnation in employment in 2010-2015, a period marked by strong volatility. After a sharp downturn in SME value added and employment in 2011-2013, SMEs started to recover in 2014. From 2016 onwards, the growth in SME value added and employment that began in 2014 is expected to accelerate. The forecast for 2015-2017 is for 11 % growth in value added and a 4 % increase in employment, equivalent to net job creation of more than 41 000.
Implementing the Small Business Act for Europe (SBA): Slovakia’s SBA profile has more weaknesses than strengths. Over time, its performance seems to be stagnating in many SBA areas rather than catching up with the rest of the EU. There are major concerns in some of the core areas of the SBA, namely ‘Responsive administration’, Skills & innovation and Internationalisation. ‘Second chance’ is the fourth area where Slovakia trails the EU average. On the positive side, on Environment Slovakia consolidated its above-average performance compared with the rest of the EU. The SBA areas that saw the most important policy initiatives over the past 15 months were Entrepreneurship, ‘Responsive administration’ and Skills & innovation. Since 2008, progress on implementing SBA policy has been rather modest in all policy areas.
SME policy priorities: SBA implementation measures need to intensify and focus on the core areas of the SBA. The adoption of the SBA and the full implementation of its core tenets are particularly important for ‘Think Small First’ and ‘Responsive administration’. Systematic application of regulatory impact assessments is also a high priority. Promising new measures such as the ‘SME test’ and the ‘National Business Centre’ functioning as ‘one stop shop’ need to be fully implemented without any further delay. Start-up time and costs have to be brought in line with the SBA objectives. On Skills & innovation, more needs to be done to improve the innovative capacity of SMEs. Slovakia also needs to provide more active policy support to enable more of its SMEs to export to extra-EU markets. Finally, on ‘Second chance’ the time and costs related to insolvency procedures have to be reduced considerably.
Past and future SME performance: In Slovenia SMEs provide over 72 % of employment and nearly 63 % of value added, which is in both cases about five percentage points above the EU average. Overall, Slovenian SMEs have been recovering relatively well from the financial crisis, as in 2015 value added and employment were ‘only’ 4 % and 5 %, respectively, below their 2008 values. The outlook for SMEs is positive: in 2015-2017 value added is predicted to increase by 6 % and employment by 2 %, therefore creating close to 8 000 new jobs.
Implementing the Small Business Act for Europe (SBA): The SBA profile of Slovenia is solid and broadly in line with the EU average. There has been a moderate progress in implementing the SBA, but in none of the SBA areas Slovenia performs above the EU average. Most significant improvement has in the recent period been achieved in Access to finance, and to some extent in the area of ‘Responsive administration’. However, Slovenia does not yet offer a favourable environment for entrepreneurship in general.
SME policy priorities: The reduction of administrative burden on businesses needs to be accelerated. This goes hand in hand with increasing the efficiency of the public administration. A full and comprehensive implementation of the ‘SME test’ is essential. Policy intervention is also required to reduce high labour costs and to address the lack of qualified workforce. Entrepreneurship education needs to be strengthened. Financing conditions for creditworthy businesses have recently improved, but it would be important to further enhance also the access to alternative financing, particularly useful for innovative high-growth SMEs.
Past and future SME performance: Despite recent improvements, Spanish SMEs in the non-financial business economy have not yet recovered from the crisis. SME value added and employment in 2015 are still 28 % and 22 % respectively below their 2008 levels. However, Spain came out of recession in 2014 and the SME sector experienced growth for the first time since 2008. Value added in 2015 was 3 % higher than in 2013, while employment increased by 5 % during the same period. SMEs are expected to grow by 5 % in value added and 3 % in employment between 2015 and 2017, creating around 240 000 new SME jobs.
Implementing the Small Business Act for Europe (SBA): ‘Second chance’ is the only SBA area for which Spain remains above the EU average. There are three areas in which Spain performs in line with the EU average: Skills & innovation, ‘Responsible administration’ and Internationalisation. Spain’s weakest performances were for State aid & public procurement and Environment. Its performance on ‘Responsible administration’ improved on the previous year.
SME policy priorities: While a multitude of crucial SBA-related policy measures have been adopted in the past several years, it is essential that these measures are implemented properly. Spain needs to still put into force a law adopted in 2015 introducing the ‘SME test’ and regulatory impact assessments (RIAs). Moreover, given the poor performance of Spanish SMEs in innovation, new support measures need to be implemented. These measures should boost innovative products and services, taking into account the need for improvement in infrastructure and resources, while also providing incentives for cooperation between universities, firms and research. There is still room for improvement on Access to finance and particularly on late payments. In addition, control mechanisms for public procurement and coordination of procurement policies across the different levels of government also need to be improved.
Past and future SME performance: SMEs have recovered well from the economic crisis. SME value added increased by 30 % in 2010-2015, 10 percentage points more than in the ‘non-financial business economy’. SME employment grew by around 8 %. The outlook for SMEs remains positive. In 2016 and 2017, value added is expected to grow by 7 % and 6 % respectively. Over the same period, SME employment is predicted to increase by 3 % per year. This translates into 120 000 new jobs.
Implementing the Small Business Act for Europe (SBA): Sweden’s SBA profile is competitive, scoring above the EU average in five SBA areas. There is no single SBA area where Sweden needs to catch up with the EU. Sweden is among the top three performing Member States regarding Access to finance. It also surpasses the EU average on 'Second chance', Responsible administration, Skills & innovation and Internationalisation, The greatest progress in SBA policy implementation in 2015 was in 'Responsive administration', State aid & public procurement and Access to finance.
SME policy priorities: To keep its competitive edge in innovation, Sweden needs to review its current support programmes for innovative SMEs. A core challenge is to improve cooperation between public and private institutions involved in innovation policy. In this connection, the shortage of ICT-skilled experts needs to be addressed. Given the stagnating share prices of SMEs trading both within and outside the single market, efforts to promote SME internationalisation need to be stepped up.
Past and future SME performance: SMEs have strongly contributed to and benefitted from the economic upswing in recent years, even though they have not fully matched the strong growth of the ‘non-financial business economy’ as a whole. They account for more than half of total value added (53 %) and nearly three in four jobs (74 %) of the 'non-financial business economy'. During 2010-2013, their value added grew by 22 % and their employment by 24 %, but these increases were still 2-3 percentage points lower than those of the ‘non-financial business economy’ as a whole. In 2015, new business registrations dropped for the first time since 2012 (a 9% drop compared to 2014). However, the number of de-registrations also dropped so that net gain in registrations was positive.
Implementing the SBA: Compared to last year, Turkey's SBA performance profile has deteriorated. In the areas entrepreneurship, skills & innovation and environment, Turkey performs in line with the EU average. However, its performance is below EU average under the principles 'second chance', 'responsive administration', access to finance and internationalisation. Since 2008, there has been a stable positive trend in access to finance and skills & innovation. The most significant measures that were adopted during the reference period are the ‘Entrepreneurship Strategy and Action Plan 2015-2018’ and the ‘SME Strategy and Action Plan 2015-2018’, which include actions related to several SBA principles.
SME Policy priorities: Turkey is slow in the adoption of measures promoting 'second chance' for entrepreneurs. It should strengthen its insolvency procedures, especially as regards time and costs to resolve insolvency. Despite significant efforts in promoting SME internationalisation, regulatory burdens on trade remain important, especially with respect to the number of documents required and the time to be devoted to administrative procedures. Under 'responsive administration', start-ups suffer from cumbersome administrative procedures linked to company registration. This could be addressed by single points of contact and reduced procedures. On skills & innovation, SMEs should be spurred to increase ecommerce. In addition, in order to overcome the gap of skilled workers, a network of training providers across the country and across sectors should be created. Education and vocational training schemes should be aligned to the needs of the labour market.
Past and future SME performance: The United Kingdom continues to have one of the most vibrant SME sectors in the entire EU. It has fully recovered from the financial crisis and continues to perform strongly. SME value added increased substantially during 2008-2015. SME employment is estimated to have expanded by almost 7 % during that period.
Implementing the Small Business Act for Europe (SBA): The United Kingdom’s competitive SBA profile reflects the country’s SME-friendly environment. In almost half of the SBA policy domains, the country belongs to the EU frontrunners. These include ‘Second chance’, ‘Responsive administration’, Access to finance and Skills & innovation. There are also areas with room for further improvement, most notably in State & aid public procurement and Environment. However, even in these sectors, the weaknesses are confined to very specific policy issues. The United Kingdom has seen a considerable improvement of conditions in the majority of SBA areas since 2008. This progress was fuelled by the comprehensive policy support offered to SMEs since 2008.
SME policy priorities: The United Kingdom has implemented almost all SBA recommendations. Spearheaded by a number of landmark policy initiatives in priority areas such as Access to finance, ‘Responsive administration’ and Skills & innovation, recent governments have been busy improving the conditions for SMEs in practically all areas of the SBA. Government continued its active business support strategy, led by the Small Business, Enterprise and Employment Act of 2015 and the ‘Exporting is GREAT’ initiative. Challenges and future SBA policy priorities are located in policy areas which received less policy attention. In particular, the economy-wide skills shortage in the UK needs to be addressed. Other challenges include broadening SME participation in public tenders, e.g. by facilitating access to remedies, reducing contract enforcement costs and increasing SMEs’ uptake of resource-efficiency measures and green products. Finally, further efforts are needed to help more SMEs to become exporters, especially to extra-EU markets.
Please note: The fact sheets do not constitute a comprehensive assessment of country policies, but rather contribute to the assessments, and should be regarded as a supplement to, and not a substitute for, any other relevant in-depth studies of SME policies.
Compare the latest data on number of SMEs, number of people employed and value added in different countries, and compare data within each participating country on the relationship between SME size and these three variables.
Compare data from 2008-2015 on number of SMEs, number of people employed and value added within a country.
Compare detailed data on the SBA principles between two countries and with the EU average.
Flash Eurobarometer on SMEs, Resource Efficiency and Green Markets (16 December 2013)
Flash Eurobarometer on SMEs, Resource Efficiency and Green Markets (27 March 2012)
Study on the SMEs' impact on the EU labour market (16 January 2012)
Study on EU SMEs and subcontracting