Changes and improvements
The EBS regulation (EBSR) has significantly improved the European business statistics through burden reduction, improved agility, and responsiveness to new demands.
A summary of the main changes brought about by this regulation - in particular the additional data on European businesses which will be collected as well as short explanations - are outlined below.
The EBSR has introduced new data on service activities. The previous legal setting for European business statistics consisted of 10 separate legal acts. Its focus was on manufacturing, with just minimal information available for the services sector. Together, manufacturing and services represent around 70% of the value added in the EU economy.
The development of cross-border activities and the changes in the way businesses are organised due to the Single Market and globalisation can be better monitored. This is achieved by using additional data collected in the statistical business registers and EuroGroups Register (EGR) as well as on international trade, foreign affiliates, and global value chains.
Furthermore, additional regional data on business demography on a local level will also be collected.
Producing statistics following the ‘compartmentalised approach’ in the old legal setting, meaning where each business statistics domain was covered by a separate legal framework, was no longer sustainable because it led to inconsistencies in the data.
Current information technology and standards can ensure integrated production processes. These include:
- multi-source or cross-domain data sources
- integrated management of registers
- use of standards and shared tools for data exchange and dissemination
- standardised quality management.
These requirements could not be met under the old legal setup.
The improvements brought by the EBSR are manifold:
- ensures methodological consistency across business statistics domains, for example regarding statistical variables, statistical registers, and confidentiality rules
- makes the integration of different business surveys organised at the national level possible and reduces the overall burden
- makes data linking across business statistics domains possible through improved survey coordination
- coordinates microdata exchange among national statistical authorities (NSAs) within the European Statistical System (ESS) to ensure consistency across the EU
Common definitions of variables
Under the previous legal framework it was difficult to research business statistics because a number of ‘cross-cutting’ variables had similar, but not the same definitions. ‘Cross-cutting’ variables are those used across several business statistical areas (EBS domains, topics, and detailed topics).
For instance, turnover was used in 6 business statistical areas: structural business statistics, foreign affiliate statistics both inward and outward control, short-term statistics, community innovation statistics, and information and communication technologies statistics. However, there were differences as to whether or not to include subsidies and excise duties between statistical areas.
The definitions used also differed from those used in business financial statements. As a result, they made it more difficult to use administrative data sources.
The EBSR provides common definitions for all business statistics. With this regulation, the concepts are more compatible with company accounting data, and - as a result - administrative data can be used more efficiently.
Employment size classes
Another inconsistency resolved by the EBSR is related to the breakdowns of enterprise populations into size classes of employment, which allow for an analysis of businesses of different sizes. The previous business statistics did not serve users who needed a comprehensive overview of all data for a certain size class of businesses.
Concretely, the size classes of employment used in research and development (R&D) and innovation statistics were determined on the basis of the number of employees, whereas for other business statistics the number of persons employed concept was used.
As a result, data from other business statistics, such as value added from structural business statistics for a certain size class, was inconsistent with related data from a similar size class for R&D expenditure.
Prior to the adoption of the EBSR, European business statistics were produced based on different rules and concepts formulated in 10 different EU regulations. This approach led to decreased decision-making efficiency and increased the administrative burden.
The previous approach also often redirected technical statistical issues to the European Parliament and Council, which posed a risk in balancing the responsiveness in fulfilling European information needs and the costs and response burden linked to producing these statistics. This ultimately resulted in delays in data availability and rigidity in adapting to changing key user needs.
EBSR has fixed these weaknesses by better reflecting the principle of division of responsibilities, as envisaged in the Lisbon Treaty.
The European Parliament and Council focus on decisions at the programming level that are important for EU policies. More specifically, the statistics that are needed to set the EU’s policy agenda and measure progress.
The technical requirements for producing the necessary statistics and indicators are outlined in European statistical system statistical law, meaning EU regulation 223/2009 on European statistics.
This division of decision-making leads to both accountable and responsive statistical programming, as well as efficient, integrated data production and dissemination.
Modern statistical production uses increasingly integrated business processes to take advantage of the rapidly growing capabilities of information technology.
These integrated business processes include:
- multi-source and cross-domain data integration
- integrated management of registers and statistical frames
- creation and maintenance of common infrastructure
- common standards and shared tools for data processing
- exchange and dissemination
- standardised quality assessments
Data collection methods that can reduce production costs are becoming increasingly necessary, so the EBSR supports the use of innovative methods to collect data. If the processes are standardised, this would lead to lower costs. Improvements in one EU country may be duplicated in others.
Eurostat, the United Nations Economic Commission for Europe (UNECE), and the national statistical institutes (NSIs) are working to standardise the statistical business process. These efforts aim to increase the use of common standards and shared tools for statistics production – efforts such as the definition of the ‘Generic Statistical Business Process Model’ (GSBPM) and the ‘Common Statistical Production Architecture’ (CSPA).
Innovative ways for developing new indicators could be either national or collaborative endeavours. National initiatives could include linking data from different business statistics domains, among others. On the other hand, joint activities throughout the entire ESS could include the exchange of microdata to reduce costs and burdens.
Pilot exercises have shown that data linking is an effective way to enhance existing data at a low cost, and make better use of collected information. These exercises were based around data linking in the areas of innovation, ICT, and international outsourcing.
Eurostat created an ‘Enterprise Group Register’ based on input from the NSIs. It provides a valuable service and information source about the structure of business groups.
Further efforts to work together in other areas of statistics could promote more cost savings and burden reduction.
In the past, quality issues in business statistics caused by a lack of coherence and comparability among data collections, led to problems for data users. This was because, historically, business statistics developed with different methodologies and production processes. There were also weaknesses in coherence and comparability.
The law controlling business statistics is mainly output-based. NSAs are free to use different approaches and methods for the production of statistical data that consider specific national contexts and needs.
Data are produced according to agreed-upon definitions, and quality reporting is in place to ensure a sufficient level of quality of the statistics disseminated across the EU. However, inconsistencies are evident and even pronounced in some cases, especially in domains where ’mirror’ data are produced - such as imports and exports of goods and statistics on foreign controlled enterprises.
The EBSR enables further cooperation by sharing more data. This could help improve the quality of business statistics, national accounts, and balance of payments data. This is in addition to the mandatory exchange of microdata through the Eurogroups register and the intra-EU trade in goods. The collection of one additional variable relating to intra-EU goods exports has the potential to reduce Intra-EU asymmetries to a considerable extent.
The previous set-up was not suited to provide data on ‘cross-cutting’ topics, meaning variables used in several business statistics domains. As a result, there were redundancies and duplication of work. This parallel work structure led to inefficiencies, such as unnecessary costs for NSIs and an increased burden for data providers.
By ensuring consistency of the legal requirements for data production for European business statistics, surveys can now be aligned and used to produce statistics for different domains with just a single data collection.