SMBs (micro, small, and medium-sized enterprises) account for seven out of ten jobs, make up 90% of businesses, and represent 50% of the world’s GDP, according to the UN. Although each country has its own context, in every case these small businesses carry significant weight in their economies, and the challenges they face are globally common.
According to the BBVA Microfinance Foundation (FMBBVA), in Spain, small businesses account for 53.22% of employment, a share higher than the European Union average (46.8%). Raising the average size of these businesses would yield, among other benefits, one million jobs and a 5.6% increase in GDP, according to the Spanish Confederation of Small and Medium Enterprises (CEPYME). In our country, microenterprises (up to 10 workers) and SMEs (10–49 workers) are concentrated in sectors such as transportation and commerce.
“In Spain, microenterprises are less productive and more numerous than in countries like Germany. However, medium- and large-sized firms are just as productive as in more advanced economies. Therefore, reducing up to 75% the productivity gap with other countries in our region hinges on increasing the share of medium and large firms,” says Miguel Cardoso, Chief Economist for Spain and Portugal at BBVA Research.
In America, Latin America and the Caribbean, entrepreneurs account for more than 99% of the total number of companies, sustaining territorial cohesion and the region’s productive base, according to the Council of Ibero-American Entrepreneurs. However, labor informality among SMBs in the region remains high (46.6%). These businesses are concentrated in trade, personal services, and hospitality—labor-intensive sectors, but with low productivity.
The FMBBVA, which supports more than three million entrepreneurs across five Latin American countries, emphasizes the importance of offering both financial and non-financial solutions to microbusiness owners. “With the right guidance, entrepreneurs have created nearly 180,000 jobs in the last year. These jobs are essential in contexts with few job opportunities. We have seen that businesses that hire grow and amplify the impact of credit on the entrepreneur and their surroundings,” says Javier M. Flores, CEO of FMBBVA.
SMEs in Colombia account for more than 99.5% of all firms, they concentrate between 71% and 79% of employment, but contribute less than 50% of GDP, confirming the broad outlines of SME employment and productivity for the entire region. Juan Ruiz, BBVA Research’s Head of Country Analysis, notes that “if the productivity of microenterprises in Spain is half that of large firms, in Latin America it is only about 6%. This disparity of up to 16 times explains why jobs created by micro-entrepreneurs can be more precarious and their ability to invest in innovation and digitalization is lower.”
