Europe’s 34 million small and medium-sized enterprises grew in number, output and employment in 2025, according to new reports published by the European Commission.
The Commission’s Annual Report on European small and medium enterprises (SME) 2025/2026 said on Monday that the number of SMEs rose by 1.8% in 2025, while their real value-added — a measure of the economic value businesses add — increased by 2.5% and employment grew by 1.0%.
SMEs were still recovering from recent crises, and pointed to technology uptake as one factor linked to productivity, including the use of artificial intelligence (AI).
Large firms were more likely to use AI than smaller ones, the report said. AI technologies were used by 55.0% of large enterprises in 2025, compared with 30.4% of medium enterprises and 17.0% of small enterprises.
The report also looked at challenges SMEs face in supply chains during disruptive technological change, using the automotive sector as a case study.
Women entrepreneurs face barriers to growth and finance
A separate Commission report on women entrepreneurs said women account for 33% of business owners in the EU.
Women business owners were concentrated in sectors including personal services (69%), health and social work (65%), and education (57%), while being under-represented in other sectors.
The Commission report also identified barriers for women-led businesses in starting and scaling up, as well as difficulties accessing finance.
Both reports will be discussed at the SME Envoys Network meeting tomorrow.
