Abstract
The importance of small and medium-sized enter-prises in European employment is outlined using research produced for the First Annual Report of the European Observatoire for SMEs. The paper emphasises how far SMEs with under 500 employees provide the main share of employment in entire sectors of the economies of EC Member States. Furthemore, new job generation and hence the prospects of holding down unemployment are increasingly reliant upon the existence of a thriving small business sector. Howeyer, such reliance raises issues concerning « job quality » in SMEs and the prospects for maintaining labour productivity levels and future labour productivity growth. Such issues are likely to become increasingly important as the Single European Market becomes a practical reality.
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