High-growth SMEs: the engine of employment and productivity
The OECD report “Unleashing SME Potential to Scale Up”, developed with the European Commission, explores how small and medium-sized enterprises can grow sustainably and enhance competitiveness. Drawing on firm-level data from 17 countries and more than 2,500 policy initiatives, it finds that all SMEs can scale, but younger, digital, and knowledge-intensive firms are more likely to succeed. Scaling up, the study argues, is not just about growing—it is about transforming through investment in people, technology, and strategic management. SMEs that scale up strengthen their economies’ global competitiveness by raising productivity and generating innovation spillovers in addition to creating new jobs.
Key highlights:
- SMEs as growth engines. The vast majority of firms are SMEs and half of all business sector jobs in OECD countries are in SMEs. Between 2014 and 2020, in OECD countries and accession candidate countries with available data, start-ups and growing SMEs created, on average, 16 additional jobs for every 10 jobs created by large firms.
- Investment drives growth. Over half of scalers (those SMEs that grow by one-third over three years in employment, turnover, or both) do so after having previously invested in human capital, innovation, or productivity. These so-called strategic scalers are 20% more productive than the average SME before scaling up, and 35% more productive after three-years of scaling up.
- Younger and tech-oriented firms lead scaling. 38% of young SMEs scale, compared with 22% of mature ones (those operating for more than ten years). However, because there are significantly more older firms, mature SMEs account for 58% of scalers in total. Digital SMEs are 30% more likely to scale.
- Post-growth challenges. 54–73% of scalers sustain or continue growth, while one in ten shrink or exit the market. Access to finance and skilled labour is decisive to maintain scale.
- Policy priorities: broad support and targeted action. The OECD advocates a dual approach—broad-based measures on finance, skills, and digitalisation combined with tailored support for high-potential firms.
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