These charts show which businesses are driving the EU economy

As the Eurozone nears recession territory, a key priority for the European Union (EU) is to find ways to grow the economy, a central talking point at the upcoming World Economic Forum Annual Meeting 2024.

New data from Eurostat shows how different sized businesses contribute to the EU economy. The data provides insights on where turnover is highest, and which sectors are contributing the most money.

And while over 99% of EU companies are small and medium-sized enterprises (SMEs), over half of the bloc’s net turnover comes from large businesses.

Turnover – the amount of money received from the sale of goods and services – is a useful way to measure business activity and financial health. Eurostat’s latest preliminary data, which covers 2022, shows the breakdown by business size.

Almost all of the businesses operating in the EU are categorized as micro or small, defined as employing fewer than 50 people. Only 0.2% of enterprises are ‘large’ (employing 250 people or more) and 0.8% are ‘medium-sized’ – defined as 50-249 employees – and these figures are unchanged from a year earlier.

Globally, SMEs make up about 90% of businesses and over half of all employment, according to the World Bank. With the EU, SMEs make up 99.8% of the total enterprises in the bloc, and are responsible for over 100 million jobs.

It’s clear why the EU views SMEs as “the backbone of Europe’s economy”, and “essential to Europe’s competitiveness and prosperity, industrial ecosystems, economic and technological sovereignty, and resilience to external shocks”.

Eurostat also breaks down turnover into four categories: industry, construction, trade and other services.

Industry had the most turnover of all categories in 2022, responsible for 35% of net turnover, compared with 29% for trade, 6% for construction and 30% for other services.

‘Other services’ include transportation, accommodation, education, social work and entertainment. This sector employs more than 80 million people, which is over half of all EU employees.

Last year, the second-largest single market in the world had to contend with high inflation, but this year, inflation looks set to drop back again.

The European Central Bank (ECB) makes regular projections on what it thinks will happen to its economy. For 2024, it says that EU inflation has continued to fall back, and will average 2.7% in 2024, compared with 5.4% in 2023.

This year, growth is a key focus for the EU. Economic growth is important because it drives increases in incomes, our standard of living and our life expectancy, while reducing poverty.

But the growth outlook isn’t much brighter than last year. The ECB estimated growth in 2023 to be 0.6%, and is projecting 0.8% growth in 2024.

“Growth is expected to strengthen from early 2024,” it said, “as real disposable income rises – supported by declining inflation, robust wage growth and resilient employment – and export growth catches up with improvements in foreign demand.”

But the economic outlook continues to be highly uncertain, with the World Economic Forum’s Chief Economists Outlook and the ECB highlighting conflict in the Middle East, as well as energy and commodity price fluctuations, as key risks.

The uncertain economic environment creates the backdrop for Davos 2024, and Creating Growth and Jobs for a New Era is one of four main themes at the Annual Meeting, which starts on 15 January.

Here are three sessions covering the European economy.

1. Musical Chairs: Europe in the New Global Economy

The EU has maintained its competitiveness by championing free trade, fair competition and a rules-based system. Will this focus continue or will the EU adopt new policies to shape its economy?

2. The Business Case for EU Enlargement

Nearly 20 years after the European Union’s "big bang" enlargement in 2004, the bloc's long-stalled ambition to accept new members has experienced a striking revival. This session explores the moral and geopolitical arguments for the EU's eastward expansion.

3. Uniting Europe's Markets

At a time when European economies face higher borrowing costs and strained public budgets, financial integration in Europe remains lower than before the global financial crisis. This session explores how the EU can compete with other advanced economies by developing its capital markets.