Uphill Recovery: EU’s Small and Medium-Sized Growing Again

Written by | Monday, November 23rd, 2015

Small and medium-sized enterprises (SMEs) in traditional sectors are beginning to gain momentum for the first time since the financial crisis hit Europe six years ago. In other words, SMEs are creating jobs again when last year those companies added more than one million jobs (1.3 percent), according to the SME report that was presented last week. This positive development is expected to intensify in the upcoming two years thanks to improving macroeconomic conditions adding 1.7 percent new jobs by 2016 while the number of firms will also keep on growing across the block. “The future looks relatively bright,” Costas Andropoulos, head of unit for competitiveness and innovation, commented.

When it comes to the performance in particular sectors, less technology-intensive SMEs lost more of their jobs than more technology-intensive SMEs. Manufacturing sector, for example, is still underperforming with employment levels 11 percent below the pre-crisis period. Generally, technology-intensive sectors did not create new jobs but this is unnecessary as the crux of the European economy is a solid industrial base in countries like Germany. “There is no reason or indication to assume that, for example, technology-intensive manufacturing firms and construction firms could not replicate the employment expansion observed in knowledge-intensive services firms” like business services or accounting, the SME report explains.

Despite SME’s piecemeal revival, the European Commission is concerned about the existing obstacles within the EU internal market that prevent SMEs from fully utilizing the potential of the 500-million market. Elzbieta Bienkowska, Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, admitted that “many obstacles” are still in place when firms export throughout the EU. Moreover, Ms Bienkowska stressed that it is “unacceptable” that a long period of time is generally needed to settle disputes, which have an impact on small businesses. Many things need to change “without delay”, she concluded.

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