The EU submitted a report on European small businesses. As per the report, SMEs in Europe contribute significantly to the European Economy in terms of employment. SMEs contribute to about 67% of employment in private, non financial economy. SMEs employ 88 million people, while large enterprises employ 43 million people. Among the differrent size classes in SMEs, micro firms are the largest source of employment, employing 39 million people, constituting to 30% of total private non financial economy employment. Micro firms employ 2 persons on an average, therefore 92% of all employees contributing to 30% of the total private employment.
Between 2002 and 2007, there was an increase by 8.7 million jobs in the non financial sector of EU. SMEs showed a growth of 7.3 million in employment, while LSEs showed increase by 1.4 million. Thus, SMEs’ contribute to 84% of growth in total employment growth of 67%.
According to Eurostat, the birth and death of an enterprise also contributes positively to employment growth. Newly born enterprises (almost being micro enterprises) in the EU, accounted for on average 3.3% of total employment in 2005. This outweighed the loss of employment due to death of some enterprises.