Business Efficiency within the Framework of the EU Single Market

Abstract: The article explores the functioning of small and medium-sized enterprises within the framework of the EU Single Market, with particular attention to productivity, competitiveness, and structural challenges arising in the process of European economic integration. A comparative analysis was conducted on the productivity dynamics of enterprises of various sizes during the period 2018–2025 across selected EU industrial ecosystems. The results reveal a growing productivity gap between large enterprises and SMEs, attributed to unequal access to finance, digital technologies, market infrastructure, and innovation capacity. It was found that sectors highly sensitive to external factors (renewable energy, textiles, and tourism) exhibit significant productivity fluctuations, primarily due to seasonality, demand volatility, and regulatory shifts. In contrast, sectors such as construction, the social economy, trade, and creative industries display more stable trajectories, driven by structural inertia, strong domestic demand, and lower dependence on global supply chains. The study also analyses regional differences in the regulatory environment, particularly regarding the implementation effectiveness of EU directives. The SBA Scoreboard indicator system was employed to assess the institutional environment for SME development across Member States. The findings highlight pronounced geospatial disparities, with Austria, the Netherlands, and the Baltic states offering the most favourable conditions for SME performance, while Bulgaria and Greece face systemic challenges. A four-dimensional model of business environment efficiency is proposed, including participation in public procurement, access to finance, integration into the Single Market, and internationalisation. The study confirms that productivity serves as a systemic indicator of SME efficiency, particularly in the context of sustainable development. The research substantiates the need to reinforce SME support policies aimed at advancing digital transformation, reducing internal market barriers, fostering innovative ecosystems, and enhancing the competitiveness of SME within the integrated EU economic space.