Entrepreneurship - statistical indicators

Data extracted in June 2017. Most recent data: Further Eurostat information, Main tables and Database. Planned article update: June 2018.

Authors: George Papadopoulos, Baudewina Dijkhuis, Pekka Alajääskö, Anton Roodhuijzen (Eurostat, Structural business statistics and global value chains).

This article highlights aspects of entrepreneurship using data from structural business statistics (SBS), employer business demography (EBD) and business demography (BD), international trade in goods statistics by enterprise characteristics (TEC) and the community innovation survey (CIS).

Young, high-growth enterprises are important sources of economic growth, employment, innovation and even international trade but there had been a lack of statistics tracking them specifically. The Eurostat-OECD entrepreneurship indicator programme (EIP), created in 2007 by Eurostat, the OECD and partner countries, aims at collecting internationally comparable statistics on high-growth enterprises, young high-growth enterprises (also known as gazelles), and on entrepreneurship in general. To facilitate this, standard definitions, concepts and indicators have been developed and an employer business demography data collection set up. Currently available indicators include high-growth enterprises, young high-growth enterprises and exports by enterprise size class. However, statistics on some important aspects of entrepreneurship are still scarce or completely missing, and so development work continues. In particular, recent development work focuses on indicators on export performance by enterprise age, to complement the already available indicators on export performance by enterprise size class.

Figure 1: Distribution of number of enterprises by size class (persons employed), 2014
Source: Eurostat (sbs_sc_sca_r2)
Figure 2: Distribution of employment by enterprise size class, 2014
Source: Eurostat (sbs_sc_sca_r2)
Figure 3: Distribution of value added by enterprise size class, 2014
Source: Eurostat (sbs_sc_sca_r2)
Figure 4: Value added (1 000 €) per person employed by enterprise size class, 2014
Source: Eurostat (sbs_sc_sca_r2)
Figure 5: Value added vs employment, shares by enterprise size class, 2014
Source: Eurostat (sbs_sc_sca_r2)
See glossary for Country codes
Figure 6: Employer enterprise birth rates, deaths rates, net growth and churn by enterprise size class, 2013
Source: Eurostat (bd_9fh_sz_cl_r2)
See glossary for Country codes
Figure 7: Average size and employment share for 3-year-old enterprises (2012) and 5 year old enterprises (2014)
Source: Eurostat (bd_9bd_sz_cl_r2)
See glossary for Country codes
Figure 8: High-growth enterprise rates by turnover vs high-growth enterprise rates by employment, 2014
Source: Eurostat (bd_9pm_r2)
See glossary for Country codes
Figure 9: Young high-growth enterprise (gazelle) rates by turnover vs young high growth enterprise rates by employment, 2014
Source: Eurostat (bd_9pm_r2)
See glossary for Country codes
Figure 10: Distribution of exports by enterprise size class, 2014
Source: Eurostat (ext_tec01)
Figure 11: Average value of exports by enterprise size class, 2014
Source: Eurostat (ext_tec01)
See glossary for Country codes
Figure 12: Share of innovative enterprises per type of innovation by enterprise size class, 2014
Source: Eurostat (inn_cis9_type)
Figure 13: Organisation and marketing innovation of small enterprises, 2014
Source: Eurostat (inn_cis9_type)
Figure 14: Product and process innovation of small enterprises, 2014
Source: Eurostat (inn_cis9_type)

Main statistical findings

Small, medium-sized and large enterprises

Small enterprises make up vast majority of enterprises

Small enterprises are defined as having fewer than 50 persons employed. Figure 1 shows that they make up the vast majority of enterprises, ranging from 95 % in Switzerland and 97 % in Germany to above 99 % in the remaining countries (only countries for which data are available are shown in the figure, as well as in the other figures of the article). In contrast, large enterprises with 250 or more persons employed account for less than half a per cent of all enterprises in the EU. Medium-sized enterprises, which employ between 50 and 249 persons, are generally more predominant in countries with a greater proportion of large enterprises.

Small enterprises account for about half of employment

The distribution of total employment across small, medium-sized and large enterprises is shown in figure 2. Small enterprises typically account for between 40 % and 60 % of total employment. The two exceptions are Italy at the high end with 67 % and the United Kingdom at the low end with 37 %. When looking at figures 1 and 2 together, we see that small and medium-sized enterprises in Greece, which together account for almost 100 % of all enterprises in Greece, account for 86 % of total employment, whereas in the United Kingdom 98 % of small enterprises account for only 37 % of total employment.

Value added per person employed highest in large enterprises

The distribution of value added by size class is shown in figure 3. Small enterprises typically account for around 35 % to 50 % of the total value added. The lowest shares of value added by small enterprise are found in Romania (31 %), Poland (32 %) and the Czech Republic and Germany (both 34 %). Due to economies of scale, value added per employed person is generally higher in large enterprises, followed by small enterprises, than in medium-sized enterprises (see figure 4). The graph shows this is not always the case; exceptions can be found in Luxembourg, the Netherlands and the United Kingdom.

In figure 5, the shares of employment and of value added for small, medium-sized and large enterprises have been plotted against each other. Although there are considerable differences between countries, the three enterprise groups are easily distinguishable. When comparing the average share of value added to the average share of employment in each of the three groups we see the following:

  • small enterprises produce about 40 % of total value added with about 51 % of total employment;
  • medium-sized enterprises produce 21 % of total value added with 19 % of total employment; and
  • large enterprises produce 38 % of total value added with 29 % of total employment.

Therefore, for large enterprises the share of value added tends to be greater than their share of employment whereas the opposite is true for small enterprises. As regards medium-sized enterprises, the respective shares are relatively close.

Employer Business Demography

Enterprise birth and death rates decrease with size

Having put small enterprises in the context of the economy as a whole, figure 6 shows developments in the enterprise population in 2013 using employer business demography statistics, which divide the population into three size classes — 1-4 employees, 5-9 employees and at least 10 employees. Enterprise birth rate, death rate and business churn, which is the sum of birth rate and death rate, tend to decrease with enterprise size. This relation is not seen so clearly in the net business population growth because enterprise deaths and births more or less cancel each other out.

Enterprises tend to grow with age

Business demography tracks employment in enterprises established in a certain year and surviving for 1 up to 5 years. Based on these statistics, figure 7 shows employment share in relation to enterprise average size (figure 7 presents Business Demography data as employer Business Demography data were not available for several countries). The data points for three-year-old enterprises (2012 reference year) and five-year-old enterprises (2014 reference year) are connected by an arrow. In general, the arrows point upwards, indicating that on average those enterprises that survived to be 5 years old in 2014 have a larger average size compared to 2012. Therefore, surviving enterprises tend to grow in terms of number of persons employed. At the same time, in most countries the arrows point to the left which indicates a smaller share of employment in 2014 than in 2012. This indicates that the rest of the business economy has grown at a higher rate than the 5-year-old enterprises of 2014. However, in Slovakia, Malta and Finland the employment share of the 5-year-old enterprises in 2014 has increased compared to 2012 (arrows point to the right). This would indicate that the 5-year-old enterprises of 2014 grew at a higher rate than the rest in the same period (2012 to 2014). Further insight on this issue can be gained by comparing the total number of persons employed in the population of active enterprises of 2012 and 2014 with the number of persons employed by the 3-year-old enterprises of 2012 and the 5-year-old enterprises of 2014.

More high growth measured by turnover than by employment

There is a special interest in high-growth enterprises (HGE) (enterprises with average annualised growth greater than 10%, over a three year period), and gazelles (young high-growth enterprises). Figure 8 shows HGE rates measured by turnover against HGE rates measured by employment. Most countries have more HGEs measured by turnover than HGEs measured by employment. The rates for the gazelles (see figure 9) are much smaller for both employment and turnover, but here too there are more gazelles measured by turnover than by employment. More information on high-growth enterprises can be found in the recent news release on high-growth enterprises in the EU.

Exports and innovation by size class

Highest average export values in France, the Netherlands and Belgium

Figure 10 shows the share of exports by size class. For many countries the size class for a relatively large share of exports is unknown, making country comparisons difficult. Comparing those countries where the unknown percentage is less than 5% shows a large difference in the shares for large enterprises, from 27 % in Estonia to 60 % in Sweden. Figure 11 shows the average value of exports by size class. France has the largest value for micro enterprises. The Netherlands has the largest value for small enterprises, while Belgium has the largest value for both medium-sized and large enterprises.

One in five small enterprises involved in each type of innovation

Large enterprises are generally more involved in innovation than small (Eurostat does not collect innovation statistics for enterprises with fewer than 10 employees) and medium-sized enterprises (see figure 12). However around one in five small enterprises are involved in each of the three types of innovation shown in the graph (data for process innovative enterprises are confidential and therefore not shown in the graph). An enterprise may be involved in more than one type of innovation.

High levels of innovation in Luxembourg, Italy and Germany

Figures 13 and 14 show the differences between countries in the type of innovation done by small enterprises. Figure 13 shows the shares of organisation and marketing innovative small enterprises and figure 14 shows shares for product and process innovation. Ireland and Switzerland appear both in the top five organisational and marketing innovating countries as well as in the top five product and process innovating countries; Bulgaria, Romania, Hungary and Poland are in the bottom five of both groups.

Data sources and availability

The data used is in this article comes from five different sources:

  1. Structural Business Statistics (SBS),
  2. Employer business demography (EBD),
  3. Business demography (BD),
  4. International trade in goods by enterprise characteristics and
  5. Community innovation survey (CIS).

Data for some countries are missing due to data not being available or confidentiality reasons. Only countries for which data are available are shown in the figures of the article.

Context

Small and medium-sized enterprises (SMEs) are the backbone of Europe’s economy, providing the majority of all new jobs. The European Commission aims to promote entrepreneurship and improve the business environment for SMEs to allow them to realise their full potential in today’s global economy. COSME, the EU programme for the Competitiveness of Small and Medium-sized Enterprises is running from 2014 to 2020, with a planned budget of EUR 2.3 billion.

In recognition of the importance of the issue, the OECD and Eurostat are collaborating in the joint Entrepreneurship Indicators Programme and, in this context, have taken steps to improve policy-relevant measurement of entrepreneurial activity.

See also

Business demography statistics

Innovation statistics

International trade by enterprise characteristics

Further Eurostat information

Publications

Entrepreneurship determinants:culture and capabilities

Database

Dedicated section

Methodology / Metadata

Source data for tables, figures and maps (MS Excel)

Other information

Entrepreneurship and Small and medium-sized enterprises (SMEs) - European Commission - DG Growth

External links