Mittelstand - Themes

Fewer SMEs in Germany compared to EU average

In 2021, 99.6% of all German enterprises were considered small and medium-sized enterprises (SME), which is only slightly less than in the EU (99.8%). The differences (in the company portfolio) are more pronounced in the value added and the shares of employees. According to Eurostat 58% of all employees in Germany in 2021 were employed by an SME, whereas the European average was two-thirds. About 47% of all value added in Germany was contributed by SMEs, the European average was about 52%.

German SMEs are bigger by average than SMEs in the EU. This can for instance be seen in average employee count per SME. The average employee count in Germany is 7,1 per SME, which is the most in all 27 EU member states, where the average is 3,6.

The density of SMEs is much lower in Germany than in the EU. In 2021, there were about 3.032 SMEs per 100.000 inhabitants in Germany, whereas the EU average 5.103 SMEs per 100.000 inhabitants. Particularly high SME densities were observed in Czech Republic (9,916 SMEs), Slovakia (9,106 SMEs), and Portugal (8,964 SMEs).

In 2021, about 4% of SMEs in the manufacturing sector in Germany were classified as high-tech (EU-27: 1,9%). Consequently, a higher proportion of employment (4.9%) and value added (6.5%) in Germany was attributed to this sector compared to the EU average (3.2% and 5.1% respectively).

In the service sector, the proportions of companies, employees, and value-added engaged in knowledge intensive services in Germany in 2021 were nearly equal to the EU-27 average. Approximately one-third of SMEs and their value-added belonged to knowledge intensive services, with a corresponding share of employees at around 27%.

A comparison of SMEs across EU-27 countries is only possible based on largely harmonized statistics such as the Structural Business Statistics (SBS).

However, when interpreting the data, it's important to note that SMEs are defined solely based on the employment thresholds set by the European Commission. The presented results exclusively relate to the non-financial sector of the business economy. They do not include agriculture, forestry, public administration, other non-market services, as well as credit and insurance institutions.

Thus, these findings differ fundamentally from the German SME statistics, which are compiled by the IfM Bonn based on the business register.