The EU is experiencing a significant shift in private business ownership due to an ageing population, with 450,000 businesses changing hands annually, threatening continuity in a third of cases. Without clear succession strategies, many family-owned businesses risk closure. Financial buyers, like private equity firms, often prioritize short-term profits over long-term sustainability, leading to value extraction, weakened businesses, and eroded local tax bases. Aggressive acquisitions can result in relocating production to low-wage regions, while foreign buyouts may transfer intellectual property and talent out of the EU.

To counter these issues, some owners are turning to employee ownership, which embeds social responsibility into businesses. Research shows employee-owned firms have higher productivity, greater resilience, and lower turnover. However, the EU lacks legislative and institutional support for such transitions. Countries like the US, UK, and Canada have adopted Employee Stock Ownership Plans (ESOPs), which allows workers to collectively buy shares without personal investment, supported by government-backed financial mechanisms. In the US, 10% of the private workforce is employed by ESOP firms, many created to address succession challenges. The UK has seen employee buyouts become the 2nd most popular succession solution.
Slovenia is introducing the ESOP model to the EU, but scale up is only possible with adequate financial instruments and advocacy at the EU level.