In 2022, the EU experienced significant entrepreneurial growth, with 3.4 million new businesses formed, surpassing closures. Small businesses play a key role in this expansion.
In 2022, the EU saw the establishment of 3.4 million new companies, surpassing the 2.8 million businesses that closed. This growth highlights a resilient entrepreneurial environment and suggests that more individuals are venturing into business ownership.
Among EU member states, Lithuania, Portugal, and Estonia have demonstrated impressive rates of new business formation. Lithuania led with a remarkable 18.3% increase in new businesses, followed closely by Portugal at 16.7% and Estonia at 16.6%. These countries have emerged as entrepreneurial hubs, with increasing numbers of individuals pursuing new ventures and contributing to the region’s economic vitality.
Variations Across Member States
While certain countries have experienced rapid business growth, others show more cautious trends. Austria, Denmark, and Italy reported the lowest rates of new business formation, with growth rates of 6.2%, 7.4%, and 7.9%, respectively. These figures indicate a more reserved approach toward entrepreneurship, which may reflect economic factors, regulatory challenges, or market conditions in these nations.
Estonia, Bulgaria, and Ireland, however, have also experienced higher proportions of business closures, with figures of 20.6%, 15.6%, and 15.6%, respectively. These countries may face particular challenges in sustaining businesses, which highlights the need for targeted policies to support long-term business survival.
The Dominance of Small Enterprises
Despite the mixed growth rates, the EU is home to over 32 million businesses, with small enterprises making up the vast majority. Micro and small enterprises, defined as those with fewer than 50 employees, account for an overwhelming 99% of the region’s businesses. These small businesses are an integral part of the economy, generating nearly one-third of the EU’s total turnover, which amounted to €11.9 trillion in 2022.
Sector Contributions: Industry Leads, Services Employ Most
In terms of sector performance, the industry sector emerged as the top contributor to turnover in 2022, accounting for 35% of the total. Services followed closely with 30%, while trade and construction generated 29% and 6%, respectively.
Despite industry’s dominance in turnover, the services sector employed the most people, comprising 51% of the workforce across the EU. Industry, trade, and construction follow with smaller proportions of employment, reflecting the sectoral shift towards service-based economies in many EU nations.
The overall data from Eurostat paints a picture of a thriving and diversifying EU business landscape. While small businesses continue to be the backbone of the economy, the sectoral distribution of turnover and employment shows the increasing role of services. Despite challenges in certain countries, the EU’s entrepreneurial spirit is strong, and its business ecosystem remains a crucial pillar of economic growth.