Project detail

SMES and high inflation

Over 2022, small and medium-sized enterprises (SMEs) have faced historically high inflation, resulting from the COVID-19 pandemic, the Russian war against Ukraine and certain measures implemented by the Member States. The main goal of this study was to understand the effect of the sustained high levels of inflation on SMEs’ performance, including their ability to invest as well as their profitability, turnover, access to labour, competitiveness, adoption of green and digital solutions, late payments, bankruptcies, participation in public procurements, etc. The project assessed the effect of inflation in fourteen industrial ecosystems and drafted SME-specific policy recommendations outlining both short-term relief measures and measures to cushion the long-term effects of inflation.
The project relied on both quantitative and qualitative methods. For the quantitative analyses, we employed publicly available data (e.g. Eurostat, Eurobarometer), as well as micro-level survey data (e.g. ECB SAFE, EIB Investment Survey), data from private sources (e.g. Orbis), and big data collection (e.g. Technote) to perform four main tasks:

  • Stock-taking of existing key indicators capturing both inflation and its effects on SMEs’ performance across the EU.
  • Multilevel regression analyses to estimate the effect of high inflation on SMEs in fourteen industrial ecosystems.
  • Simulations of future scenarios of how inflation will impact SMEs in the short term (e.g. next two years).
  • The development of an interactive Tableau dashboard summarising the evolution of inflation by country and by industrial ecosystem.

The project team also used qualitative methods to analyse five case studies covering the following ecosystems: construction, agri-food, energy-intensive, electronics, and textiles. For each, the project team conducted a literature review, interviewed key stakeholders, and integrated the ecosystem-specific results of the statistical analyses to provide a holistic view of the impacts of inflation on the selected ecosystems.

Client: EU Commission - DG GROW
Client type: public
Year: 2022-2023
Consortium: PPMI (Leader)
this project