Greece has one of the highest concentrations of small and medium-sized enterprises (SMEs) in the European Union, yet these businesses also rank dead last when it comes to productivity. This paradox—many firms, little output—is at the heart of new findings published by Alpha Bank in its latest economic bulletin, which draws on data from the European Commission’s annual report on SMEs.
In 2024, Greece counted 79 SMEs per 1,000 residents, significantly above the EU average of 58. Despite their abundance, these businesses contribute far less economic value per employee than their European counterparts. Last year, Greek SMEs generated an average of just €20,100 in value added per worker—more than five times lower than in Ireland, which tops the EU productivity rankings.
Analysts from Alpha Bank attribute this persistent weakness to structural features of the Greek economy. Most SMEs in Greece are exceptionally small and tend to operate in sectors with limited technological or knowledge intensity. As a result, the country's business ecosystem remains fragmented and under-equipped for innovation or scale.
These findings echo earlier conclusions by high-profile studies, including the Pissarides Committee report, which has called for deep structural reforms in the Greek economy. Alpha Bank’s chief economist Panagiotis Kapopoulos emphasizes that improving productivity will require a fundamental shift: Greek businesses must grow larger, diversify into more dynamic sectors, and invest in technology. The bank points to capital investment and digital transformation—both accelerated in the wake of the pandemic—as critical paths forward.
Greece has begun to tap into EU support mechanisms to address these challenges. Through the Recovery and Resilience Fund, 265 SME loans worth €2.79 billion have already been signed, and another €1.4 billion has been disbursed in grants. However, uptake of digital tools remains low. As of 2024, only 52.4% of Greek SMEs had achieved even a basic level of digital integration, well below the EU average of 72.9%, placing Greece at the bottom of the European digital readiness index.
Despite these productivity setbacks, SMEs are vital to the Greek economy. They represent 99.9% of all non-financial businesses, provide 84.7% of private-sector jobs, and generate 62.8% of gross value added. Notably, the growth seen in recent years has come almost entirely from micro-enterprises—those with fewer than 10 employees. These tiny businesses are far more prevalent in Greece than elsewhere in Europe and account for 47% of employment and 25% of value added, compared to EU averages of 30% and 20%, respectively. A key reason for this is the high rate of self-employment in Greece, which stands at 27%, nearly double the EU average.
Even amid repeated economic crises, the number of SMEs in Greece has grown, along with their share in employment and output—a trend expected to continue into 2025. The European Commission predicts a 3.6% increase in the number of micro-enterprises next year.
Still, the gap in productivity remains stark. Among micro-enterprises in Greece, value added per employee was just €14,300 in 2024. That figure rises slightly for small businesses (€21,600) and more substantially for medium-sized ones (€37,000), yet all still trail far behind EU norms.
