Low productivity hurts SMEs
Average added value per employee is second lowest in the EU, Commission report says
Greek small and medium-sized enterprises have the second lowest productivity in the EU according to the latest annual report on SMEs by the European Commission.
The added value per SME employee in Greece was €22,400 in 2023, ahead of only Bulgaria (€21,600) among the 27 member-states. The EU average is €54,500.
A silver lining among these dire numbers is that Greek SMEs had the third largest growth in gross added value (GAV), 3%, in the EU, where on average, GAV dropped 1.6%. The EC report estimates that productivity will grow at an even faster clip, 5.7%, in 2024, the second fastest in the EU.
This positive productivity growth in 2023 was driven exclusively by very small enterprises (up to nine employees), whose productivity rose 13.2%, while it declined in SMEs.
The report notes that Greece depends on SMEs more than other EU countries, representing 99.9% of the total of non-financial companies and employing the highest percentage of people in the EU, at 84.6%; the EU average is 65.2%. SMEs’ GAV, at 67%, is the sixth highest in the EU, which has an average of 53.1%.
“Average SME productivity increases with enterprise size,” notes Alpha Bank’s weekly Bulletin on Economic Developments. “Therefore, gains in the average size of SMEs could lead to serious economies of scale, better credit rating and opportunities to invest in new sectors that will boost their productivity,” it adds.
Investments in capital equipment and digital upgrades would be crucial in boosting productivity, the analysts note, adding that the digitalization of SMEs significantly lags the EU average.
According to the Digital Economy and Society Index (DESI), Greek SMEs are in 24th place in being digital-intensive, at least at a rudimentary level: Only 43.3% satisfied this criterion, against an EU average of 57.7%.
The percentage of SMEs engaging in electronic commerce (18.2%) does not significantly lag the EU average (19.1%), but e-commerce accounted for just 5% of total sales versus 12% in the EU.
