The 2025/2026 Annual Report on European SMEs is out, and the picture is one of resilience with a caveat.
The EU's 34 million SMEs demonstrated solid growth in 2025: value added grew by 2.5%, employment by 1.0% and the number of enterprises by 1.8%. A recovery from recent crises is consolidating across the board.
But the report's most important finding is about what comes next. Productivity (not just growth) is now the central challenge for European competitiveness. While larger firms typically generate more output per worker, firm size alone doesn't determine the outcome. Technology, sector and geography can all level the playing field, and crucially, these are factors that policy can influence.
The opportunities are clear:
💡 Digitalisation and AI can strengthen SME productivity and competitiveness, especially for those willing to invest in new technologies.
🌱 The green and digital transitions are creating new markets in clean tech, health and digital solutions.
🌍 The Single Market remains a powerful engine for growth, though administrative burdens and cross-border barriers continue to hold businesses back.
The message from the data is straightforward: future growth won't happen by itself. It will be built by the SMEs that invest in innovation, digitalisation and international collaboration, and by the policies that support them in doing so.
📊 Read the full report
Many of these themes are heading directly to the agenda at the SME & Clusters Assembly 2026 in Dublin this November, from SME-friendly policy making and AI adoption to scaling up and the green transition.
👉 Register for the SME & Clusters Assembly 2026
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