In 1950, the Schuman Declaration set out to pool coal and steel production across six European countries. Through shared industry at the heart of the post-war reconstruction, it aimed to improve living standards and ensure that future conflict was not only unthinkable, but also impossible. The landmark agreement paved the way for European economic and political cooperation, and ultimately the European Union.
Eric de Montgolfier is the CEO of Invest Europe.
Today, Europe Day celebrates the ethos of peace and unity behind the declaration, rather than the practical measures. By 2050, the EU aims to achieve Net Zero, leading the charge for decarbonisation of the global economy. That transition will require huge investment but can unlock enormous opportunity, driving a new era of economic growth and wealth creation for European citizens.
Not only are Europe’s industrial priorities very different today, but so are our financial markets. As policymakers seek to drive economic cooperation through a European Capital Markets Union, private capital is viewed as an essential part of the transition. With over €1 trillion in capital under management across Europe, including almost €350 billion ready to be invested, private equity and venture capital has a proven track record of backing businesses and technologies that can propel Europe toward a greener future, in turn driving growth and increasing employment in cities and rural communities across the continent.
Invest Europe’s Private Equity at Work report demonstrates just how ingrained private equity and venture capital is into the fabric of Europe’s economy and society, and how transformational investment can be for job creation, particularly in sectors that will define Europe’s development over the next three decades or more.
According to our data, collected from thousands of businesses, job creation by private equity and venture capital companies far exceeded the rates seen by the average European business. Companies in our sample added 451,111 net new jobs in 2022, similar to the working population of Latvia. The figure represents a 7.2% increase for the year, compared to the 2% growth of all European businesses. All segments of the industry performed well ahead of the European average, from young, fast-growing start-ups to mature national and multinational corporations.
Private equity and venture capital backed companies employed 10.9 million people at the end of 2022, representing 5% of the European workforce. To put the figure into context, it equates to the entire population of the Czech Republic.
This is not an isolated phenomenon, but a pan-European story. The Nordics was the fastest growing region for employment in 2022, adding 9.5% more jobs, led by 12.5% growth in its largest market: Sweden. However, companies in Central and Eastern Europe had the greatest outperformance of their local region, adding 6.6% more jobs, more than seven times the 0.9% growth across all CEE. Even private equity and venture capital in Ukraine contributed to overall job creation, as investors and managers backed companies with the resources to survive and grow.
The study also segments employment and job creation by sector, illustrating private equity and venture capital’s influence in industries at the heart of a more competitive and sustainable Europe. The Information & Communications Technology (ICT) sector was the third-largest employer and the fastest-growing in 2022, adding 13.8% more jobs. The Biotech & Healthcare, Energy & Environment, and Financial & Insurance Activities sectors all recorded high-single-digit employment growth in 2022, underlining European private equity’s strength in vital growth industries.
When Invest Europe first published Private Equity at Work, the aim was to set the record straight on employment and show that private equity and venture capital does not destroy jobs. Now in its fifth year, our research shows very clearly that private capital investment is the catalyst for growth and job creation in excess of the average year in, year out.
Between 2017 and 2022, through one of the most volatile and unpredictable periods in living memory, European private equity and venture capital funds invested more than €550 billion in over 30,000 companies across the continent. And over that period, companies in our sample consistently, and indeed strongly, increased worker numbers. The number of jobs supported by venture capital-backed companies exceeded 1 million for the first time, effectively doubling the number of workers between 2017 and 2022, while technology companies created an average of 12.5% more jobs per year over the period, adding the most jobs of any sector in absolute terms.
Wherever you look in Europe, private equity and venture capital is active in building better businesses. This is not just financial investment, but critical support for companies and economies, as well as people and communities. It is fuelling innovation and talent, and taking a lead on sustainability and the skills needed. This is an industry entirely focused on the sustainable value creation that Europe needs.
