Europe’s 32 Million Micro-Enterprises Are Getting More Productive: Trends, AI Adoption Gaps, and Growth Barriers

Bar chart showing SME performance scores by EU member state in 2025. Ireland scores highest and Bulgaria lowest. Yellow Bar chart titled "Figure 38. SME performance inside the Single Market by Member State based on the SME 2025 Scoreboard." Shows 2025 performance scores (scale 0 to 1) for EU Member States and the EU27 average, alongside yellow dash markers indicating 2024 scores. Lithuania leads at 0.71, while Bulgaria ranks lowest at 0.26, with the EU27 average at 0.49.

The European Commission’s report reveals that micro-enterprises, constituting 94.5% of EU SMEs, show remarkable productivity growth, projected at 13.5% by 2026, surpassing larger firms. However, significant barriers such as regulatory burdens restrict their growth potential. Policymakers must enhance AI and digital adoption while reducing compliance costs to support these businesses.