Did you know?
The 23 million SMEs in Europe act as incubators of entrepreneurial culture, and provide 100 million jobs.
SMEs make up 99% of all companies operating in Europe and the SMEs provide 67% of total EU employment.
SMEs play a fundamental role in the European economy
It is also important to remember that all large companies start as SMEs. The figures above have led industrial policy in the European Commission to become more centred on SMEs in recent years. “Small enterprises are the backbone of Europe’s economy and the key to our competitiveness” Manuel Baraso, 2005
Overall, SMEs make a significant contribution to a country’s GDP and employment. This can vary on a county to county basis, depending on its political and economic history. For example, SMEs in Belarus and Ukraine contribute less than 5% of the formal economy to GDP, compared to that of 80% in Chilli and Thailand. In Europe alone, the GDP contribution from SMEs can range from 9% in Switzerland to 80% in Greece. In general, the higher the GDP contribution from the SME sector, the higher the percentage employment from SMEs
SMEs are important to society in general
SMEs are important for economic and social reasons. SMEs are the providers of a range of essential products and services that we use in our daily lives, from the hair dresser to the electronics company. SMEs provide high quality and diverse employment opportunities. The employment an SME provides to its employees may not allow for significant career advancement, but the diverse set of skills required to work in an SME is good for job quality and satisfaction. The SME plays an important role in social cohesion and inclusion and fuels the creative and Information Communications and Technology (ICT) sector
SMEs Need Support
There is recognition that incentives for entrepreneurship are important. This is because the 23 million SMEs act as incubators of entrepreneurial culture and provide millions of jobs. In order for SMEs to maintain their contribution to the economy, they need support to expand into new markets, increase revenue and create more employment within member countries.