Enterprises by size
Key findings
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In all countries, the vast majority of enterprises (between 70% and 95%) are micro-businesses, i.e. enterprises with fewer than ten persons employed, and in most countries over half of all enterprises are non-employer enterprises, i.e. enterprises with no employees such as the self-employed who work on their own account and do not employ other persons.
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Partly reflecting the higher entry costs and capital intensity in manufacturing, SMEs in OECD countries are disproportionately located in the services sector, with high numbers of non-employer enterprises in wholesale and retail trade and construction activities.
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In around half of OECD economies, especially those hit hard by the crisis, the number of enterprises in 2014 remained below levels in 2008. The construction sector was especially affected, and to a lesser extent manufacturing, but services fared much better in most OECD economies. In all sectors growth in the number of SMEs typically outperformed growth in larger enterprises in most OECD economies.
Relevance
Small businesses can be important drivers of growth and innovation. Without a conducive business environment, however, they may face barriers to growth, in particular in capital-intensive sectors where access to finance and integration into global value chains are important determinants of success.
An enterprise is defined as the smallest combination of legal units that is an organisational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations.
The basis for size classification is the total number of persons employed, which includes the self-employed.
In this publication, micro-enterprises are defined as firms with 1-9 persons employed; small enterprises: 10-49; medium enterprises: 50-249; and large enterprises: 250 and more. The group of micro, small and medium-sized enterprises (SMEs) refers to the size class 1-249.
The number of persons employed corresponds to the total number of persons who work for the observation unit, including working proprietors, partners working regularly in the unit and unpaid family workers.
Information on data for Israel: https://doi.org/10.1787/888932315602.
Comparability
All countries present information using the enterprise as the statistical unit except Korea and Mexico, which use establishments. Since most enterprises in these countries, as elsewhere, consist of only one establishment, comparability issues are not expected to be significant in relation to the total population of businesses, but comparisons relating to the proportion of smaller firms will be upward biased, compared to other countries, while comparisons relating to the proportion of larger firms will be downward biased.
The size-class breakdown 1-9, 10-19, 20-49, 50-249, 250+ provides for the best comparability given the varying data collection practices across countries. Some countries use different conventions: the size class “1-9” refers to “1-10” for Mexico and “1-19” for Australia and Turkey; the size class “10-19” refers to “11-50” for Mexico; the size class “20-49” refers to “20-199” for Australia; the size class “50-249” refers to “50-299” for Japan and Korea, and “51-250” for Mexico; finally, the size class “250+” refers to “200+” for Australia, “300+” for Japan and Korea, and “251+” for Mexico.
For Canada, the United States and the Russian Federation, data do not include non-employer enterprise counts. For the business economy, estimates of non-employer enterprises amount to approximately 1.7 million in Canada, 15.3 million in the United States, and to 2.5 million in the Russian Federation. Data for Switzerland exclude businesses with less than 3 persons employed.
Data for Finland and Portugal exhibit a break in the series in 2013 and for Canada and France in 2014. Data for the United Kingdom exclude an estimate of 2.6 million small unregistered businesses; these are businesses below the thresholds of the value-added tax regime and/or the “pay as you earn (PAYE)” (for employing firms) regime.
In Figure 2.4, the Business Demography dataset is used as data source; this dataset covers non-employer enterprises for all countries including Switzerland.
Sources
OECD Structural and Demographic Business Statistics (SDBS) (database), https://doi.org/10.1787/sdbs-data-en.
Further reading
OECD (2017), Small, Medium, Strong. Trends in SME Performance and Business Conditions, OECD Publishing, Paris, https://doi.org/10.1787/9789264275683-en.
OECD (2010), Structural and Demographic Business Statistics, OECD Publishing, Paris, https://doi.org/10.1787/9789264072886-en.
Ahmad N. (2007), The OECD’s Business Statistics Database and Publication, Paper presented at the Structural Business Statistics Expert Meeting, Paris, 10-11 May 2007, www.oecd.org/dataoecd/59/34/38516035.pdf.
