Home-based and small business reshape Europe after pandemic as digital work expands
After the pandemic, small and home-based business across Europe didn’t move in one clear direction. The pattern is uneven, but a few things repeat almost everywhere — more digital tools, more work shifting into homes, and family-run businesses taking on a bigger role again.
In 2020–2021, EU countries saw a drop in sales and new business registrations. At the same time, digital adoption jumped. Small businesses moved fast into online sales, remote services, and platforms like marketplaces. A lot of them simply stopped relying on physical locations and shifted part or all of their work online.
What came after the pandemic peak is also fairly consistent. Businesses operating from home — online shops, freelancers, small consulting work, home production — have generally held up better than traditional formats. Lower fixed costs seem to be the main reason, along with flexibility. Some of these models that started as temporary solutions have now become permanent.
Family businesses remain a core part of the European economy. In Spain they account for roughly 60% of GDP. In Germany, most industrial companies are family-owned and support millions of jobs. Italy, Sweden and several other countries show a similar pattern — small and family-run businesses often overlap with home-based production or very local services.
New niches have also opened up in recent years. Cleaning services, handmade goods, online tutoring, small-scale logistics, consulting, dropshipping — these are among the most common. There is also steady growth in home-focused products, DIY markets and so-called “smart home” solutions, especially energy-saving technologies.
In some EU countries, regulation has helped accelerate the shift. In Lithuania, the State Food and Veterinary Service (VMVT) says simplified rules introduced in 2019 allowed more small home food producers to enter the market. More than 500 new operators have started since then. Home baking is the most common activity, followed by prepared meals and desserts. The regulator links part of this growth to the pandemic period, when many people turned hobbies into income sources.
The labour market story runs in parallel. Research from the German Institute for Economic Research (DIW Berlin) shows that remote work has become significantly more common after the pandemic. Before 2020 it was limited. After 2022 it became part of normal working life, especially in IT, finance, public sector jobs and large companies.
Not all sectors moved equally. Highly skilled workers are far more likely to work from home, while education and manual professions remain mostly office- or location-based. Workers with children tend to use remote work more often than others, according to the same studies.
Employers have adapted too. Job ads offering remote options have increased, while fully office-only roles are less dominant in many sectors. Still, many professions simply cannot shift away from physical presence — and that hasn’t changed.
Policy experts say governments are still catching up with the changes, especially when it comes to digital infrastructure and training programmes for both workers and managers.