Optimism Abounds: Qonto Report Predicts a Favorable Future for Small and Medium-Sized Enterprises in Europe by 2024
European SMEs Thrive Amid Challenges in 2023 and Look Forward to 2024
In a report published by Qonto, a business finance solution, it was revealed that European Small and Medium Enterprises (SMEs) have not only survived the challenges of 2023 but also overperformed, setting a positive outlook for 2024.
The report, collected in collaboration with Appinio, surveyed 2,000 senior business and finance decision-makers in France, Germany, Italy, and Spain. It found that inflation, lack of demand, and geopolitical events were the main hurdles for European SMEs, but despite these challenges, a majority of business and finance leaders expressed optimism about their companies' revenue evolution for next year.
In Germany, SMEs are planning to invest massively in tech and digitization in 2024, while French SMEs will focus on Marketing, Customer Service, and Partnerships. The companies investing in technology and digitalization are primarily those using or planning to use Artificial Intelligence (AI). About one-third of German companies already used AI in 2024, up from one-fifth the previous year, and nearly half were planning or discussing AI adoption.
The digital investments are led by firms that see AI as the most important future technology. Eight percent of the companies are planning significantly increased AI investments compared to 2024, while 21% are planning moderate increases. Only a small minority intends to reduce investments. These investments are transforming various sectors, including hospitality, where solutions like Onsai are driving digital transformation.
Inflation was the main challenge for SMEs in 2023. German SMEs were the most impacted, with 68% of business leaders raising it as the main challenge. In France and Italy, at least one in two companies suffered as a result of inflation. However, despite these challenges, a majority of business and finance leaders said their companies' 2023 performance exceeded expectations.
Entrepreneurship is a popular career option for European decision-makers, with almost three quarters of them considering creating their own company in the future. A vast majority of founders (80%) do not plan to sell their companies within the next three years. Despite some reservations about the current macroeconomic situation, a majority of founders (78%) still intend to create another company in the future.
European business leaders have a strong confidence in their forecasts for 2024. In France, 74% of leaders expressed optimism, followed by 84% in Germany, 85% in Italy, and 86% in Spain. Despite the challenges, European SMEs are thriving and looking forward to a promising 2024.
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