European
Self-employment accounted for 16% of total employment across EU25 non-financial business economy in 2005; 30% of jobs are in businesses employing less than 10 people
By Finfacts Team
Oct 5, 2006, 12:16

Eurozone countries in blue - rest of EU25 in pink

Within the EU25, self-employment accounted for 16% of total employment across the non-financial business economy (NFBE)¹ in 2005, with 19% of men self-employed, compared with 11% of women.

Small and medium sized enterprises (SMEs), which employ less than 250 people, are the backbone of the EU's NFBE, as they represented 99.8% of EU25 NFBE enterprises in 2003 and employed about two thirds of the workforce: 30% in micro businesses (with less than 10 persons employed), 21% in small businesses (with a workforce of between 10 and 49 people), and 17% in medium sized enterprises (between 50 and 249 persons).

These figures are taken from a report² published by Eurostat, the Statistical Office of the European Commission. A more complete picture of European enterprises, including a special feature on SMEs, can also be found in a new Eurostat publication, "Key figures on European Business 2006"².

Self-employment highest in the Southern Member States

Among the Member States, the highest rates of self-employment in 2005 were registered in Greece (32% of employment in NFBE), Italy (29%), Cyprus (24%) and Portugal (21%), while the lowest rates were recorded in Latvia (7%), Estonia (8%), Denmark, Lithuania and Slovenia (all 9%).

In the EU25, the highest rates of self-employment were recorded for the construction industry (25%), business related services³ (23%), distributive trades (20%) and hotels and restaurants (19%), compared to 8% in manufacturing industry and 11% in transport, storage and communication.

30% of jobs are in businesses employing less than 10 people

In 2003, micro enterprises accounted for 30% of jobs in the NFBE in the EU25 and created one fifth (21%) of the value added of the sector. Italy (47%), Poland (41%), Portugal (40%) and Spain (39%) had the highest percentage of people employed⁴ in these micro businesses, while the smallest shares were found in Slovakia (13%), Lithuania (18%), Denmark and Germany (both 20%). Micro enterprises were responsible for a larger share of jobs than of value added in all Member States for which data are available, except in Denmark (23% of value added vs. 20% of persons employed).

Small enterprises accounted for 21% of jobs in the EU25 NFBE, ranging from 12% in Poland to 27% in Latvia. They created 19% of EU25 value added. In the Member States for which data are available, they provided a larger share of jobs than of value added, with the exception of Slovenia and Italy where it was almost equal.

Large enterprises generated more value added than jobs

Medium sized enterprises in the EU25 accounted for 17% of jobs and 18% of value added in the NFBE. They were responsible for 27% of jobs in Lithuania, 26% in Latvia and 22% in Slovakia, and at the other end of the scale, 12% in Italy and 15% in Spain and the United Kingdom. Among the countries for which data are available, the share of value added was higher than the share of jobs in eleven countries and lower in four countries.

Although only 0.2% of NFBE enterprises in the EU25 employed 250 or more people, they provided 33% of jobs and generated 43% of value added. Slovakia (51%) had the largest percentage of persons employed in large enterprises, followed by the United Kingdom (46%) and Finland (41%). In all Member States for which data are available, these large enterprises generated a larger share of value added than jobs. The gap was largest in Poland (22 percentage points), Hungary (19 pp) and Portugal (16 pp). 

Employment & self-employment in the non-financial business economy, 2005*

* age group 15+ (16 years and over in ES and UK, 15 to 74 years in DK, EE, HU, LV, SE, FI and NO, 16-74 in IS), who during the reference week did any work for pay, profit or family gain for at least one hour, or were not at work but had a job or business from which they were temporarily absent. Croatia data refers to the 2^nd quarter of 2005 only.

Source: Labour Force Survey

Persons employed and value added by size of enterprise in the non-financial business economy, 2003

: data not available or confidential

1. The non-financial business economy excludes agriculture, public administration and other non-market services, as well as the financial services sector.
2. Eurostat, Statistics in Focus, Industry, trade and services 24/2006 "SMEs and Entrepreneurship in the EU" and Statistical Pocketbook "Key figures on European Business 2006". The Pocketbook provides a summary of the main features of European business and its different activities. It includes a special feature section on SMEs, which presents an analysis of the characteristics of micro, small, medium and large enterprises. The publication also serves as an introduction to the wide range of data available at Eurostat in this field. The focus is on structural business statistics: both the more traditional business statistics which are disseminated regularly, but also specific information compiled on a multi-yearly basis and the latest results from development projects on topics of key political interest. A pdf version of the pocketbook can be downloaded from the Eurostat website.
3. Business related services refers to NACE Section K and include real estate; renting; legal, accounting, book-keeping and auditing activities; tax consultancy; market research and public opinion polling; business and management consultancy; holdings; architectural and engineering activities and related technical consultancy, technical testing and analysis; advertising, labour recruitment and provision of personnel, investigation and security activities, industrial cleaning, and miscellaneous business activities not included elsewhere. In this study, it excludes management of holding companies.
4. Employed persons: persons who work in the observation unit, as well as persons who work outside the unit, who belong to it and are paid by it. It includes working proprietors, unpaid family workers, part-time workers, seasonal workers, etc