EU SMEs and Subcontracting

Recently a research was conducted by EIM Business & Policy Research (the Netherlands) and Ikei Research and Consultancy (Spain) in co-operation with local partners of the European Network for Social and Economic Research (ENSR) on “EU SMEs and Subcontracting”

This study was conducted based on the following definition: subcontracting occurs when one enterprise (the contractor or principal that wants to put a final product on the market), contracts with another enterprise (the subcontractor or supplier), for a given production cycle, one or more aspects of production, design, processing, manufacture, construction or maintenance work.

The survey results show that the percentage of SMEs involved as subcontractors or contractors is directly related to the size of the enterprises. The percentages of subcontractors or contractors increase with the size of enterprises.16% and 15% of the micro enterprises are engaged as subcontractors and contractors, respectively, whereas 21%and 17% Small enterprises are engaged as subcontractors and contractors and approximately 24% of the medium-sized enterprises are engaged as subcontractors and 21% as contractors.

The other most important findings of the study are the following:

  • About 3.7 million SMEs in the European Union are engaged as subcontractors, representing 17% of all SMEs in the EU.
  • The 12 new Member States has relatively more SME subcontractors than in the 15 old Member States.
  • Some 54% of the EU-27 SME subcontractors combine the role of subcontractor with that of contractor.
  • About 7% of all European SMEs are involved in international subcontracting practices, and 3% have plans to become involved in international subcontracting in the coming three years.
  • Most of the European SME subcontractors (90%) operate with client enterprises located within their own country. About 26% also have clients in other EU and EEA countries, whereas only 11% work for clients in third countries.

The report provides qualitative and quantitative information about the phenomenon of subcontracting in general.