Small and medium-sized enterprises (SMEs) form the backbone of the economy in Europe, with almost two-thirds of employees in the EU working for a SME, producing over half of all value added in the European economy. SMEs come in three size-bands, micro-sized enterprises which employ between zero and nine people, small businesses that employ between 10 and 49 workers, and medium-sized businesses that have between 50 and 249 workers. In terms of enterprise numbers, the vast majority of SMEs belong to the smallest size category, with micro-sized enterprises accounting for 22.82 million of the 24.3 million SMEs in the European Union.
Although Germany has the largest economy in the European Union it has only the fourth-highest number of SMEs, behind Italy, France, and Spain, and with a comparable number of SMEs to its much smaller neighbor Poland. This is due to the fact that these countries had a higher number of micro-sized businesses, at 3.56 million, 3.1 million, and 2.65 million respectively. Germany had a far higher number of small businesses, and medium-sized enterprises, however, at 320,693 and 49,237 respectively.
These larger SMEs, although fewer in number than micro-sized businesses account for a relatively similar share of employment and value added. For the European Union as a whole, SMEs employed approximately 84.75 million people, and had a combined value added of 4.15 trillion Euro. Among micro-sized and small enterprises, the wholesale and retail trade sector was the most common industry sector, while manufacturing was the most common industry sector amongst medium-sized businesses.
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