''Large companies contribute disproportionately more to a country's economic performance than smaller ones''. These are the findings of a report by the EU funded project ''European Firms in a Global Economy'', released on 28 August 2012 under the supervision of think-tank Bruegel. Small businesses face barriers to trade and research and development; thereby growing less than their large counterparts, being less productive and rendering fewer profits.
The report finds a clear relation between both export costs and obstacles to innovation on the one hand and firm growth on the other. Furthermore, the report lists issues such as taxation, regulation and enforcement as obstacles to growth having a disproportionate effect on small business. A large market is noted as imperative for a business to expect returns on innovation expenditure. Export opportunities thereby relate directly to business investment. Next to this, high investment costs hamper a firm's growth as well, indicating that R&D expenditure is crucial for business expansion.
ESBA President David Caro said: ''There is a paradox to be found here. We all agree that SMEs are the 'backbone of the European economy' and we look to our small companies to get us out of the crisis, yet large businesses still contribute disproportionately more to our economy. Unfortunately, this reaffirms the message that we have been voicing for years: cut down on the regulatory and administrative burden for SMEs, improve access to and cost of finance and allow small businesses to prosper, innovate and grow. The one-size-fits-all approach does not work; small businesses cannot deal with the same rules and regulations as their large counterparts, which is why we need to fully implement the Think Small First principle once and for all. Less than one percent of EU businesses are large companies. The EU institutions have a responsibility to maximize the growth potential of the remaining 99 per cent of European businesses, in order to become truly competitive''.