The European Commission’s Annual Report on European SMEs

The European Commission has published its Annual Report on European SMEs (2025/2026) and a new report on women entrepreneurs in Europe, providing updated data to guide future policies and funding for small and medium businesses.

Europe’s 34 million SMEs experienced solid growth in 2025, with a 1.8% increase in business numbers, 2.5% growth in real value-added, and 1.0% rise in employment. However, geopolitical tensions—such as the conflict in Iran—are disrupting supply chains, increasing energy costs, and tightening liquidity for SMEs. In the UK, 74% of SMEs reported direct disruptions, with an average loss of £38,207 since the crisis began, leading 70% to fear bankruptcy.

The reports also highlight an AI adoption gap, with only 17% of small enterprises using AI compared to 55% of large enterprises, emphasizing the need for greater technological integration. Additionally, women entrepreneurs remain underrepresented, making up only 33% of EU business owners, primarily concentrated in traditional sectors like personal services and health.

Read more: Annual Report on European SMEs 2025-26