Invest Europe issued a report Private Equity at Work measuring the impact of the private equity industry on employment and job creation in Europe in 2020, compared to 2019. Over time, the data measuring the private equity contribution to the economy will expand to create a comprehensive picture of private equity contribution to jobs and the economy that those jobs support. Data is collected via the European Data Cooperative platform, which is jointly owned and run by Invest Europe and other European private equity & venture capital national associations. Croatian Private Equity and Venture Capital Association (CVCA) participate in the collection of the data and will expand efforts in collecting the data measuring the private equity industry’s impact on employment. Mirna Marovic, CVCA’s President, stated: “While we cannot account now precisely for the private equity industry’s contribution to the job creation in the Croatian economy, we shall try to measure this impact in the future. The findings presented here below show that the private equity industry is pivotal for job creation and acts as an engine of growth for the economy. “
Private equity is one of the most important segments of the European economy present in every region and every major business sector. It provides an alternative investment mechanism to the traditional banking system who considers the risks too great. Private equity companies help to build a better business by strengthening management, improving operations, and expanding into new markets. Private equity and venture capital firms support millions of high-value jobs driving prosperity and growth in the process by making long-term investments into small, medium, and large companies.
Private equity builds successful businesses by giving them the equity and know-how necessary to expand the business and create new jobs. In 2020, a total of 103,566 net jobs were created by private equity-backed companies. Employment levels at those companies increased by 2.0% in the same year, compared with the European job market which contracted by 1.6%.
“Private equity is a positive force for Europe’s economy and society, securing employment and creating jobs both in good times and periods of crisis alike. The private equity industry – from firms focused on large buyouts, to providers of venture capital for start-ups and growth capital for entrepreneurial companies – adds jobs year in, year out. Private equity firms are investors in businesses but – more critically – investors in people. As such, this industry will continue to work to support individuals and communities. across all of Europe.” says Eric de Montgolfier, CEO of Invest Europe.
In 2020, a total of 9.9 million people were employed at private equity-backed businesses in Europe, representing 4.3% of Europe’s total 233 million workforces. That year, there were 24,663 companies in Europe backed by private equity across all industry sectors and all regions.
A total of 17,781 private equity-backed SMEs employed 854,459 people across Europe at the end of 2020. These companies increased employment at a rate of 5.0% in 2020.
In 2020, the largest number of people were employed in Business Products & Services (2,930,167), Consumer Goods & Services (2,636,222), and in Information Communications Technology (ICT) (1,313,427) sector. Private equity is a cornerstone of the European economy present in every region and every major business sector across the continent. Private equity and venture capital are supporting innovation and business expansion, which in turn is driving economic growth and job creation.