Filenews 31 October 2022 - by Theano Thiopoulou
Eurostat has carried out an interesting study by recording the demography of businesses in Europe, referring in particular to business births and business 'deaths'. In 2020, the corporate birth rate in the EU decreased compared to the previous year by 1.1 percentage points to 8.9%. Preliminary business death rates (2020: 7.6%) remained around the same level as the previous year, showing some resilience of businesses during the COVID-19 pandemic.
In 2020, the COVID-19 pandemic terribly disrupted the business environment, including the temporary shutdown of some business sectors, making many reluctant to start new businesses as existing ones tried to keep afloat. In response, governments have introduced temporary support programmes to offset the impact of the crisis, which may also explain the resilience of the corporate death rate in 2020.
In 2020, the "births" of businesses in Cyprus were 5.335 percentage 8.87% and the "deaths" concerned 2.927 businesses at a rate of 4.81%.
In 2020, corporate birth rates among EU Member States ranged from 4.6% in Greece, 5.4% in Austria, 6.5% in Italy, 6.7% in Ireland, 6.8% in Sweden and 6.9% in Belgium to 11.3% for France and Latvia, 12.1% in Estonia, 12.2% in Portugal, 14.1% in Malta and 18.1% in Lithuania. The average employment size of start-ups in 2020 ranged from 0.6 people in the Netherlands to 2.1 people in Greece. For the EU, the average size of start-ups was 1.2 people, up from 1.3 in 2019. In preliminary business death rates, Ireland recorded the lowest with 1.6%, followed by Belgium (3.2%), France (3.9%), Austria (4.1%) and Malta (4.5%). The highest corporate death rates were recorded in Lithuania with 20.8%, followed by Bulgaria (14.6%), Portugal (13.0%), Denmark (12.2%) and Latvia (11.7%).
The vast majority (2020: 99%) of enterprises in the EU's non-financial business economy were enterprises with fewer than 49 employees (small and small enterprises), followed by medium-sized enterprises (50-249 employees) with less than 0.9% of all enterprises. By contrast, only 0.2% of all enterprises employed 250 or more people and were large enterprises.
SMEs showed fair resilience in 2020, recording a smaller decrease in value added than large enterprises. In 2020, there were 23.3 million SMEs in the EU's non-financial business economy, contributing more than half of the total value added (52%, €3.4 trillion). SMEs employed 82 million people in 2020, representing 64% of all employed people.
