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Analysis | Brussels, 15 June 2020

Small businesses exporting outside the EU employ over 13 million people

An economic analysis published today by the European Commission found that a large majority of EU exporters are small and medium size companies. In 2017, out of 700,000 EU companies who sell products and services outside the EU, some 615,000 were small and medium businesses. The paper suggests that the post-coronavirus recovery strategy should ensure that small businesses continue to be strongly engaged in exporting outside the EU, as well as in outward foreign direct investment.

The analysis examines the growing importance of EU exporting SMEs* (small and medium enterprises) in recent years, the number of SMEs and their share in EU exports, as well as key aspects that can guide EU trade policy and other policies. These indicators are export competitiveness, digital intensity of their exports, greenhouse gas emissions, and jobs supported by exporting SMEs.

These SMEs exported goods worth €476 billion in 2017, which represented 28% of the total value of extra-EU exports. In many economic sectors, EU SMEs account for more than 50% of the total value of EU exports (textiles, furniture, printing and media, agricultural products, wood products).

The number of EU exporting SMEs has risen steadily in recent years, and in several sectors they are more competitive in digitally intensive products than large EU companies. SME exports are also greener. They have lower greenhouse gas emissions than an average firm, with 70% of SME exports belonging to the low to medium-low greenhouse gas emission. EU SME exports are also a major driver for export-led job creation: over 13 million jobs in Europe depend on EU SME exports, 37% of total EU jobs supported by exports.

Compared to their contributions to national economies, EU SMEs remain under-represented in global trade in terms of export value. Ensuring that EU SMEs continue to remain strongly engaged in exporting activities in the post-COVID-19 recovery is highly important. EU SMEs could become more international via outward foreign direct investment as part of the post-COVID19 recovery strategy. A stronger engagement by EU Member States in sharing data on SMEs, particularly on services trade where significant data gaps persist, would help EU policy objectives such as jobs creation and digital transition.

The Chief Economist note

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* For the purpose of this study, SMEs are defined as enterprises with less than 250 employees.