"The signs are positive for Europe's economic growth, with EU GDP growing at the fastest rate for a decade in 2017"
Sponsor foreword by Simon Lewis, Chief Executive, Association for Financial Markets in Europe
We are delighted to once again lend our support to 1000 Companies to Inspire Europe, an invaluable initiative for showcasing some of Europe’s brightest business success stories.
The signs are positive for Europe’s economic growth, with EU GDP growing at the fastest rate for a decade in 2017, as well as employment levels in the EU reaching a record high. Such uplifting statistics are in large part thanks to Europe’s bold and ambitious small businesses, the likes of which are highlighted in these pages.
Small and medium-sized enterprises (SMEs) are the engine of Europe’s economic growth, and, over the past five years, have created around 85% of new jobs and provided about two thirds of total private sector employment in the EU. But barriers to accessing the capital they need in order to grow mean they are being held back from developing.
Improving SME’s access to finance, both in terms of volume and providing access to a wider range of financial products, is a key element of the European Commission’s Capital Markets Union (CMU) initiative, a project which the Association for Financial Markets in Europe has supported since its inception. It is already seeing some positive results, for example total annual funding from venture capital, business angels and equity crowdfunding for European SMEs has increased 65% from €7bn in 2013 to almost €12bn in 2017.
We hope to see continued progress, and were encouraged by the European Commission’s proposals in May this year to make it easier for SMEs to become listed on public markets. Out of the 20 million SMEs in Europe, only 3,000 are listed on stock exchanges, so there is plenty of room for improvement. It is also well known that many small businesses struggle to reach the size required in order to attract larger institutional investors on the public markets. This is why we believe the overarching goal of CMU – that Europe’s capital markets become deeper, better integrated and more diversified – remains so important, so that promising small firms can raise risk capital at all development stages. With Brexit on the horizon, minimising fragmentation of Europe’s capital markets is more important than ever.
While there are clearly still many obstacles ahead in order for Europe’s small businesses to be able to realise their full potential, we know that they are up to the challenge. We hope that the companies listed here will inspire the next generation of entrepreneurs to push for the funding they need to be tomorrow’s creators of jobs and growth.