2024 SME performance review indicates SMEs driving job creation despite high inflation

The European Commission has released the 2024 SME performance review report, highlighting the resilience of small and micro enterprises (SMEs) in 2023, despite high inflation.  

According to the report, SMEs have been drivers of job creation, outperforming large enterprises in employment growth across 11 of 14 industrial ecosystems. The highest growth rates were observed in the ‘tourism’ and ‘digital’ ecosystems (4.5% and 3.8% respectively). For the third consecutive year, employment growth is expected to continue in 2024, with a projected 0.8% increase. However, this rapid employment growth has also led to a sharp rise in skill shortages for many SMEs (see also the Commission’s latest Survey on the Access to Finance of Enterprises).  

This edition shows that 2023 was characterized by historically high inflation affecting all enterprises, especially SMEs. Inflation rates were higher than growth rates in 2023, leading to SMEs in the non-financial business sector experiencing a decline of -1.6% in real value added in 2023, with a further -1.0% decline expected for 2024. However, SMEs in Malta, Spain, Greece, Portugal, Belgium, Denmark, and Cyprus saw real growth, despite high inflation rates also in those countries. 

Micro enterprises, that is companies with fewer than 10 employees, performed notably well, with the smallest decline in real growth at -0.4%, and a 2.3% increase in employment. This continues the trend observed in previous SME performance reviews.  

Over the medium term, SMEs have been on a growth path. Between 2021 and 2023, SMEs experienced a 4.5% growth in real value added, a 4.8% increase in employment and a 5.4% rise in the number of enterprises.  

Since 2008, the annual SME performance review has tracked the economic performance of SMEs and Member States' progress in implementing the EU SME strategy. 

More details can be found in the 2024 SME Performance Review webpage.