Young, innovative and internationally-active SMEs driving job-growth in Europe

Small and medium-sized enterprises that are largely young, innovative,
internationally-active and run by skilled managers are driving significant job
growth across the European Union. But research from Eurofound highlights that
while SMEs were responsible for a massive 71% of employment growth in the
non-financial business economy in 2014, there is urgent need for further
tailored support if a more rigorous recovery is to be realised.

These are some of the findings of the European Restructuring Monitor (ERM)
annual report for 2015, which looks specifically at the issue of job creation
in SMEs. The report identifies which types of SMEs are dynamic job creators and
determines their main drivers and barriers for job creation. SMEs, defined by
the European Commission as companies with fewer than 250 employees and an
annual turnover of up to €50 million, are hugely significant to Europe's
economy, accounting for 67% of total employment across the EU28.

Employment in Europe has been growing exponentially in areas in which SMEs are
dominant, notably in professional and administrative services. The diverse
nature of SMEs has previously made it difficult to pinpoint their specific
potential for growth and job creation. However, the report has used the
research available to identify the transversal profile of SMEs that have a
strong potential to create jobs. Youthful ambition was identified as a
generally positive factor, with ambition and strategic risk-taking paying
dividends both in terms of performance and growth. There is also an important
place for experience, with knowledgeable and qualified managers driving
internal and external performance.

The report also sets the performance of SMEs in the broader business
environment. There must be sufficient access to finance and suitable public
support for the growth of the business itself. Businesses also tend to succeed
in environments that entrepreneurship is regarded positively and a favourable
legislative and taxation regime is in place. In terms of the labour market,
there should be a sufficient labour supply, a coherent match between skills and
business requirements, and more manageable labour costs.

More info - Source: Eurofound