Brussels, 16/01/2012 (Agence Europe) - Small and medium-sized enterprises (SMEs) were responsible for 85% of the 1.1 million jobs created between 2002 and 2010 in the economy of the EU. This figure is considerably higher than the share of SMEs in total employment (67%), according to a study by the European Commission, which also stresses their vulnerability in the face of the economic crisis since 2009.
An investigation carried out in late 2010 among companies established in the 27 member states of the EU and 10 countries taking part in the programme for innovation and entrepreneurship - Albania, FYROM, Croatia, Iceland, Israel, Liechtenstein, Montenegro, Norway, Serbia and Turkey - confirmed the driving force of the 23 million SMEs in the European economy. Standing at 1%, the annual growth in employment in SMEs has outstripped that of large companies (0.5%), with the commerce sector as an exception - there, the increase in employment is just 0.7% a year in SMEs compared to 2.2% in large businesses. Micro-enterprises (fewer than 10 members of staff) create the most net employment (58%). It is also the youngest businesses (less than five years) which have proved the most dynamic in terms of job creation, particularly in the business services sector (27% of new jobs), whereas new companies in the transport and communications sector contribute the least to job creation (6%).
SMEs, however, have proved to be the most vulnerable companies to the economic crisis of 2009-2010, with their job numbers dropping by 2.4% a year on average, compared to 0.95% for large businesses. The evolution in employment was negative again in 2010, but forecasts for 2011 were more favourable when the survey was carried out. The proportion of companies which expected to make redundancies in 2011 was lower than the number of companies which actually made redundancies in 2010.
Apart from effects on employment, by far the most damaging consequence of the crisis on businesses is the overall drop in total demand for their products and services (reported by 62% of them), followed by increased payment lead-times by clients (referred to by 48% of businesses) and not enough rolling capital (mentioned by 31% of businesses).
In the face of the crisis, innovation capacity has proven to be an essential weapon. The most innovative businesses and those established in innovative countries (according to the classification in the innovation scoreboard 2010) were more likely to report growth in employment and presented the highest employment growth rate figures. The survey stressed that SMEs and innovative companies operating in the most innovative economies suffered less from the financial crisis: the global drop in demand was referred to by 70% of businesses established in modestly innovative countries, but by just 45% of businesses in the top innovating countries.
In terms of employment quality, although the study reveals that employees in SMEs are, on average, less productive, less well paid and less likely to join a union than employees of large companies, it does however note that micro-enterprises have an advantage over their competitors as regards the well-being of human resources, with factors such as work environment, a balance between work life and private life and working time management. (EH/transl.fl)