Annual report on European SMEs 2022/2023 : SME performance review 2022/2023

SMEs make up over 99% of businesses in the European Union and are the backbone of EU-27 economy. This report evaluates their prosperity in 2021 and 2022, and forecasts their performance in 2023, focusing mainly on three key variables: Value added expressed in both current and constant prices, Employment and Number of firms. Current prices value added grows significantly every year, but the notable inflation rates change the narrative: In 2022, value added actually declined by 1.4% and a similar decline is expected for 2023 as well. Employment increased in 2022 by 2.4%, but a stagnation is predicted for 2023. Within the overall SME population, micro SMEs performed better than small and medium-sized SMEs in both categories, value added and employment in 2022. A similar pattern is expected for the following year as well. Finally, the report analyses SMEs' performance through a granular breakdown of the distribution of EU-27 SMEs across NFBS industries and expands its findings at the industrial ecosystems level. The contribution of SMEs to the change in value added and employment across these 14 ecosystems varies greatly. Moreover, the long-term analysis of SMEs through a technology-intensity perspective reveals a remarkable increase in all three variables for the 'knowledge-intensive' sector.