This study captures the current state of digital and sustainability journeys for EU micro-businesses based on responses from more than 1,300 businesses across 23 countries.
This study explores progress in these journeys and identifies micro-business barriers and support needs. It also explores two emerging priorities of digital solution use: artificial intelligence and cybersecurity.
Digitalization is a competitive advantage for EU micro-businesses, and they are committed to increasing investment in digital solutions in the next 3 years. However, attitudes, current use, and investment plans vary.
To better understand the digital journey for EU micro-businesses, we segmented them by key elements: their digital attitudes, investment intentions, and solution use. What emerges are three profile groups: digital leaders, digital growers, and digital stagnants.
These profiles enable stakeholders to better understand micro-businesses’ unique barriers and support needs. Digital growers show the highest transformation potential—not because of where they are, but where they're going. Their intention to invest (80%, compared to 72% of leaders) demonstrates that forward momentum matters more than current maturity.
We examined whether certain business factors influenced how micro-businesses progress on their digital journey. While no single factor guarantees that a business will become a digital leader, some attributes make businesses more likely to value digital solutions and advance further along their digital journey.
Micro-businesses using online sales channels are 6x more likely to be digital leaders, compared with those that are completely offline. They use about a quarter more digital solutions and place ~15% higher value on digital than offline businesses. Selling online creates a necessity that pulls micro-businesses forward in their digital journey.
Younger businesses, established for less than 7 years, are 1.7x more likely to be planning digital investments than their older counterparts. Younger businesses are often digital-first, integrating digital from inception rather than retrofitting operations.
Businesses with 2–10 employees are nearly 2x as likely to be digital leaders compared to solo entrepreneurs. They score higher on all digital profile elements. Larger teams create capacity for digital transformation, while solo entrepreneurs can face bandwidth constraints.
Businesses with mixed-gender leadership teams are 84% more likely to be digital leaders than those with single-gender leadership, even when accounting for team size. Gender-diverse teams bring varied experience and perspectives to the digital journey, often accelerating it.
Sector doesn’t directly determine digital journey advancement, but it shapes micro-business support needs. Industry-focused firms use the most digital solutions. Manufacturing firms show the strongest investment intent. Services firms value digital highly but show low solution use, revealing an awareness–implementation gap.
Businesses in Southern Europe are 2x as likely to be digital leaders or growers as businesses in Western Europe. These businesses are 10% more likely to plan digital investment. This strong forward momentum is reflected in the region's younger firm age profile and strong competitive pressures, making digitalization a necessity, not a choice.
While micro-businesses face different challenges based on where they are in the digital transformation journey, cost barriers are universally identified.
While micro-businesses face different barriers based on where they are in the digital journey, cost barriers are universally a challenge.
Digital leaders and growers face implementation barriers, whereas stagnants face uncertainty about using digital solutions.
Digital leaders and growers report similar barriers to different degrees. They’re most concerned with implementation barriers, such as cost and keeping up with evolving technology.
Digital stagnants report barriers around usage hesitation. They're unsure whether digital solutions fit their business, or if there’s enough customer demand to justify investment.
The majority of digital stagnants (75%) are in danger of being left behind.
Why?
Digital stagnants are slightly more likely to be solo entrepreneurs, operate in the construction or industry sectors, be older businesses, and sell exclusively offline. These factors make it harder to reach them with targeted interventions, and may require different support approaches tailored to each profile to ensure that these stagnants are not left behind.
More than half of EU micro-businesses experienced a cybersecurity incident in the past two years. However, digital growers and stagnants were 2x as likely to report severe or significant incidents, while leaders were more likely to report minor incidents.
Digital growers are held back from using advanced cybersecurity mainly due to capacity, bandwidth, and cost barriers. They see value in cybersecurity solutions but struggle to find the right path to implementation.
Almost 60% of EU micro-businesses are using AI solutions or plan to use them in the near future. AI use is predicted almost entirely by digital profile: 82% of digital leaders use AI solutions, compared to 27% of growers and 24% of stagnants. For non-users, barriers to use include lower relevance, lack of expertise, and unclear guidance on getting started.
Non-users report AI barriers related to priority-setting and knowledge gaps. AI solutions are a lower priority for non-users, who are unclear on how to start using them. They also remain skeptical about the benefits of AI.
Addressing these barriers is critical for encouraging non-users to use AI in the future.
Digital leaders are more likely to use AI proactively, to develop a strategic advantage and stay ahead of demand. Growers are more likely to use AI to power growth, to access new markets and customers. Stagnants are more likely to use AI reactively, to cover operational gaps and catch up on business basics.
EU micro-businesses are still in the early stages of their journey to use digital solutions that enhance sustainable practices, with two-thirds reporting using just one or no solutions. However, they are committed to increasing investment in sustainability solutions in the next three years. Nearly one in two EU micro-businesses rate sustainability solutions as highly or critically important for their competitiveness, and 70% plan to use solutions in the next year.
Three distinct sustainability profiles emerge: leaders, growers, and stagnants. Growers, in particular, show a slightly stronger future commitment to sustainability than leaders do.
Leadership gender diversity, sector, and region are the most likely factors that influence whether micro-businesses will become sustainability leaders.
For micro-businesses that do not use or plan to use sustainability solutions, the most frequently reported barriers are priority-setting, knowledge gaps, and resource constraints. For instance, 42% of non-users consider these solutions a lower priority, and 20% report a lack of clarity about their value.
Affordability or financing are identified by all sustainability profiles, indicating that costs are a concern for all. Overall, leaders report the highest support needs, whereas stagnants are least likely to report support needs, likely because of their limited engagement.
We examined whether digital leaders were also more likely to be sustainability leaders and whether digital stagnants were also more likely to be sustainability stagnants. We found that digital growers are 2x more likely to also be sustainability growers, suggesting businesses committed to growth pursue both digital and sustainability journeys.
