Enterprise birth rates in the EU decreased in 2020


In 2020, the rate of enterprise births in the EU decreased compared with the previous year by 1.1 percentage points (pp) to 8.9 %. Preliminary rates of enterprise deaths (2020: 7.6 %) remained about at the same level as the year before, showing some resilience of enterprises during the COVID-19 pandemic.

This information comes from data published by Eurostat today. The article presents a handful of findings from the more detailed Statistics Explained article on structural business statistics.

In 2020, the COVID-19 pandemic disrupted the business environment tremendously, including the temporary shutdown of some business sectors, making many reluctant to start new businesses as the existing ones struggled to keep afloat. In reaction, governments introduced temporary support schemes to offset the impact of the crisis, which may also explain the resilience of the enterprise death rate in 2020.

In 2020, enterprise birth rates among the EU Member States ranged from 4.6 % in Greece, 5.4 % in Austria, 6.5 % in Italy, 6.7 % in Ireland, 6.8 % in Sweden and 6.9 % in Belgium to 11.3 % for both France and Latvia, 12.1 % in Estonia, 12.2 % in Portugal, 14.1 % in Malta and 18.1% in Lithuania.

The average employment size of newly born enterprises in 2020 varied from 0.6 persons in the Netherlands to 2.1 persons in Greece. In terms of the EU, the average size of newly born enterprises was 1.2 persons, down from 1.3 in 2019.

As for enterprise preliminary death rates, Ireland registered the lowest value at 1.6%, followed by Belgium (3.2 %), France (3.9 %), Austria (4.1 %) and Malta (4.5 %). The highest enterprise death rates were recorded in Lithuania with 20.8 %, followed by Bulgaria (14.6 %), Portugal (13.0 %), Denmark (12.2 %) and Latvia (11.7 %).

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Methodological notes: 

  • Business demography are statistics about, amongst other things, the birth, survival (followed up to five years after birth) and death of enterprises within the business population. It reports changes in the stock of enterprises within the business economy from one year to the next, reflecting among other things the level of competition, entrepreneurial spirit and the business environment.
  • EU enterprise death rate in 2020 (7.6%): the slight decrease of the enterprise death rate of 0.5 percentage points, compared with 2019, should be interpreted with caution and might be within the error margin of the preliminary estimate.
  • Enterprise birth amounts to the creation of a combination of production factors, with the restriction that no other enterprises are involved in the event. Births do not include entries into the business population due to mergers, break-ups, split-offs or restructuring of a set of enterprises, nor do the statistics include entries into a sub-population that only result from a change of activity. The birth rate is the number of births relative to the stock of active enterprises.
  • Enterprise death amounts to the dissolution of a combination of production factors, with the restriction that no other enterprises are involved in the event. An enterprise is only included in the count of deaths if it is not reactivated within two years. Equally, a reactivation within two years is not counted as a birth.