ESSnet on Consistency Workshop Gresham Hotel, Dublin, 24th and 25th of April 2012 Dublin Workshop ESSnet Consistency 24-25 April 2012

The Statistical Business Register Role and Place in Economic Business Statistics Dublin Workshop ESSnet on Consistency 24-25 April 2012 Jean Ritzen Statistics Netherlands

Outline Introduction Modeling society: several and different views Why and what is a business register Difference between an administrative BR and a statistical BR (administrative: instruments for control and governance) Basic content and requirements of SBR Goals and uses in statistics Challenges Some figures A look into the future Discussion Dublin Workshop ESSnet Consistency 24-25 April 2012

Modeling Society, what does it mean? Social order Social structure Social processes Several and different views e.g. economic view Economic order Economic structure Economic processes Economic Statistics Dublin Workshop ESSnet Consistency 24-25 April 2012

Economic Statistics  actor based Economic (institutional) statistics describe economic actors and processes within and between actors. Conceptual frames: System of National Accounts (SNA) European System of Accounts (ESA) Describing: Types and definitions of entities (economic/statistical units) Types and definitions of transactions/flows between entities Classifications to be distinguished and applied Dublin Workshop ESSnet Consistency 24-25 April 2012

Economic Statistics Operational infrastructural frames and metadata systems Population (survey) frames Business (survey) frames Institutional sector classification Industrial classification (kind of activities) Classification of changes Definitions of entities/units Definitions of terms Size-classifications (turnover/employment) Other, e.g. editing and processing rules Coherency required Dublin Workshop ESSnet Consistency 24-25 April 2012

Business (Survey) Frames Most known and important one for system of business statistics: Statistical Business Register: A full and comprehensive list of all entities, institutionally and formally involved in production and financing processes of the economy to facilitate and support the collection of statistical data and the compilation and dissemination of statistical information. The entities are standardized according the operational frame of definitions of appropriate units. Dublin Workshop ESSnet Consistency 24-25 April 2012

Statistical Business Register (1) The Statistical Business Register (SBR) is the basic infrastructural backbone in the system of economic statistics: Population frame for business statistics List of units and characteristics Rules and procedures for co-ordination of statistics Instrument to reach consistency in and between statistics Basic reference information Part of surveying methodology Sampling procedures and grossing up procedures Frame/tool for survey management and survey control Frame/tool for control of administrative burden Dublin Workshop ESSnet Consistency 24-25 April 2012

Statistical Business Register (2) More complex than a register of natural persons and/or households because of the many ways units manifest themselves in the real world, e.g. many kinds of legal forms and ways of being organized. Need for standardization into (objective) statistical units: Enterprise group Enterprise Local unit Statistical units appropriate for registration Dublin Workshop ESSnet Consistency 24-25 April 2012

Legal/Administrative vs. Economic/statistical Legal/administrative organization of society: The way of creation of entities and rules in order to perform optimally according goals. Regulatory and executive institutes (e.g. tax-offices) keep lists for own purposes. Focus is on governance and control with orientation on individual persons and/or institutions. Organization is according national legislation. Economic/statistical approach via standardization into standard concepts of units, independent of national legislation and/or administration (in principle). Individual information in context of groups. No direct repercussions on individuals. Dublin Workshop ESSnet Consistency 24-25 April 2012

The SBR model Domestic Legal or natural person Enterprise Economic/statistical world Legal/administrative world (Domestic) Enterprise group Local (legal) person Enterprise Local unit Dublin Workshop ESSnet Consistency 24-25 April 2012

SBR: Related EU Regulations For standardization in European Union: Regulation on statistical units Regulation on business registers Dublin Workshop ESSnet Consistency 24-25 April 2012

SBR: units and main characteristics Legal unit Local legal unit Enterprise group Enterprise Local Unit Time stamp Source key x SBR ID Number Control/ownership Legal form SNA-sector-code SIC-code(s) Size-class-code(s) Change code (x) GEO-code (Survey-codes x) Date of entry Date of birth Date of death Date of deregister Dublin Workshop ESSnet Consistency 24-25 April 2012

Some characteristics explained SNA-sector-code Institutional sector SIC-code ISIC, NACE, NAICS, ANZIC, National codes Regards main activities and secundary activities Size-class Persons employed, employees, turnover Change-code Kind of change in relation to continuity; control of events GEO-code Adress-code, postal code, province, municipality, grid Survey code Indicates the survey in which the unit is involved Time stamp : date of registation;, date of start applying; date of checking; date of end of applying Dublin Workshop ESSnet Consistency 24-25 April 2012

Classification of changes (events)* * According Ad Willeboordse and Peter Struijs: paper presented at ICES-I, 1993 ** Number of units before and after the change: x>1, y>1. Dublin Workshop ESSnet Consistency 24-25 April 2012

SBR: Sources and maintenance Administrative sources (as much as useful available): tax, chambers of commerce, courts, social security (NB: avoid capriciousness!) Highly automated procedures and processing Feed-back information from statistical surveys Register-surveys Profiling: tailor-made analysis of large businesses (internet, annual reports, visits, …) Dun & Bradstreet Dublin Workshop ESSnet Consistency 24-25 April 2012

SBR: Update-procedure administrative sources Tax Social security Chambers of commerce Other Administrative Environment (units) Statistical Enterprise group Enterprise Local unit Standardized/ normalized (Local) Legal Unit Auxiliary environment Dublin Workshop ESSnet Consistency 24-25 April 2012

SBR: Update-procedure with administrative sources Tax Social security Chambers of commerce Other Administrative Environment (units) Statistical Enterprise group Enterprise Local unit Standardized/ normalized (Local) Legal Unit Auxiliary environment 2,1 mln 1,1 mln 1,2 mln 1,3 mln 2,0 mln Figurs in the Dutch SBR-system at th end of 2010 Dublin Workshop ESSnet Consistency 24-25 April 2012

Statistical Business Register ≠Statistical Database List of units with their characteristics as sample frame Statistical Database: Database with data for publishing or dissemination statistical data Different requirements Statistical data on enterprises are based on statistical analysis of data in the register. Corrections may still be necessary, possibly using a quality survey or using the confrontation and comparison of more sources  e.g. Economic demography/Business demography Dublin Workshop ESSnet Consistency 24-25 April 2012

SBR: main (possible) uses Business survey frame Stratified sampling (selection of units) Survey dispatch (names/addresses) and tool for survey management/control Instrument facilitating use of data in administrative registers for statistics (frame for standardization and normalization) Burden control + monitoring Frame for co-ordination statistics Comparability in time and over time Comparability between (sub)populations Control of continuity Statistical analysis Economic demography Small area analysis Internationally Comparability of statistics of different countries, contemporary and in time series Analysis of globalization Selling lists Dublin Workshop ESSnet Consistency 24-25 April 2012

Business register and economic statistics Place and Role of the statistical business register are very important to serve and support statistical processes. Business register is part of economic-statistics-system and has evolved to a business register system with subsystems. Statement: “Statistics are in the business register!” Dublin Workshop ESSnet Consistency 24-25 April 2012

Important stakeholders and users of the SBR All producers of economic statistics, among which: Short term statistics (STS) Yearly structural business statistics (SBS) (Production statistics and including business demography) Statistic of Balance Sheets (Financial statistics) National Accounts (NA), which are the last chain and for the compilation of these the outputs of the short term statistics and production statistics are used as the main inputs. FATS (Foreign Affiliate Statistics) FDI (Foreign Direct Investment statistics) Statistics on (un)employment Price statistics The SBR is the first chain in the chain of Economic Statistics (SBR  STS  SBS  NA). Because of the use of the same basic infrastructure (BR) and of the same coordinated definitions, all chains will be coherent and consistent to each other Dublin Workshop ESSnet Consistency 24-25 April 2012

Population selection from Statistical Business Register To reach well coordinated statistics resulting in consistency in and over time, selection criterions must be defined very precisely: Which units (enterprise/Kind of activity unit) Which activity category in terms of activity classification Which size classes Which copy of the SBR Which unit situation (according date stamps for unit and characteristics) Only if all selection criterions are identical in the selection for different surveys, the results of these surveys can be compared to each other and are consistent. The same strict requirements are for international comparison of figures. Dublin Workshop ESSnet Consistency 24-25 April 2012

SBR: main challenges Meeting traditional goals and purposes in a more efficient and more effective way (e.g. development of automatic coding systems) Efficient use of administrative sources Normalization tool in the use of administrative data for statistics: translation from administrative, legal based, concepts into statistical concepts Dealing with imperfections and frame errors International comparability of statistical data starting with harmonized SBR-concepts Support of continuity analyses (e.g. from changes in classifications) Improvement of quality Dublin Workshop ESSnet Consistency 24-25 April 2012

SBR: Quality indicators Coverage (overcoverage (% duplications) and undercoverage) Completeness/exhaustiveness Actuality, timeliness Percentage errors (all variables) Effectiveness of use available administrative information Rate of disclosure administrative data Fitness for use System-integrity (consistency) Dublin Workshop ESSnet Consistency 24-25 April 2012

Important SBR issues Awareness on: Restricted available budgets and resources Necessity of use administrative sources Budget Timeliness Response burden Importance of support in revisions of classifications (e.g. introduction of the 2008 NACE rev.2) Common responsibility for quality of statistics Continuity in sources Reconstructible frames (using time-stamping) Need for good relationships with stakeholders and statistical users  management of relationships Need for good relationships with administrative sources, resulting in possibilities to influence content Dublin Workshop ESSnet Consistency 24-25 April 2012

Important SBR development issues Expanding goals and uses internationally: Multinational enterprises Globalization Supranational statistics Further imbedding SBR-system in system of economic statistics Expanding statistical use of the SBR Further development of BR as a tool to relate “cloud”-information to the standardised actors (statistical units) Continuous improvement of management of relationships with statistical stakeholders and users Strengthen relationships with administrative sources Further imbedding of the SBR in the total information system of the society Further development of quality control Dublin Workshop ESSnet Consistency 24-25 April 2012

SBR maintenance strategy Top 350 Enterprise groups: active profiling by staff  full manual update on regular basis This is be done in a special organisational unit that is also responsible for consistency of statistical data collected at these units. Next 2000 large enterprise groups: reactive “profiling”, based on signals from system or because of special reason Manual updates by BR staff, non regular. Other units (mainly small or medium sized): Full automated procedures using source data, coming in on a daily basis (from trade register and tax administration) Dublin Workshop ESSnet Consistency 24-25 April 2012

Profiling method for large units Definition of profiling: Profiling is a method to analyse the legal, operational and accounting structure of an enterprise group at global and national level, in order to establish the statistical units within that group, their links, and the most efficient structures for the collection of statistical data. Dublin Workshop ESSnet Consistency 24-25 April 2012

Enterprise Group + Enterprise profile Operational segment 1 Operational segment 2 Ent 1 Ent3 Ent 2 Cluster of legal units under common control Enterprise Group Operational segment 1 Operational segment 2 Enterprises Enterprise 1 Enterprise 2 Enterprise3 Operational segments are for analytical purposes but are not statistical units Dublin Workshop ESSnet Consistency 24-25 April 2012

“Profiling” Results in Dutch SBR 2005 legal units enterprise groups enterprises 20 – 29  195  717 30 – 39  88  974 40 – 59  64  903 60 – 99  44  833 100 and more  37  970 Dublin Workshop ESSnet Consistency 24-25 April 2012

Redesign of the chain of economic statistics (1) Statistics Netherlands has recently given emphasis to two very important goals: Improvement of efficiency (doing the work with less staff) (Further) Reduction of administrative burden at enterprises Under the conditions: Compilation of the same or of more statistical outputs . Keeping at least the same quality Dublin Workshop ESSnet Consistency 24-25 April 2012

Redesign of the chain of economic statistics (2) The ways the goals are achieved are: Redesign of the whole chain of economic statistics, from BR to National Accounts Improved tuning of the several stages in the compilation of statistics (data collection, data-editing, data processing) More use of data available in administrative registers for the compilation of economic statistics Creation of an increased size of automated procedures. Change of the organisation at Statistics Netherlands Dublin Workshop ESSnet Consistency 24-25 April 2012

Redesign of the chain of economic statistics (3) In the redesign project some important changes are introduced and some additional tools are being developed in the BR area. The delineation of the statistical units is being improved because of the availability of additional information on interdependencies of legal units (information on control, coming from the tax registers) The development of tools for combining data of different administrative sources according the statistical units In practise, the delineation of the enterprise unit is being improved, what resulted in many more enterprise units as a combination of legal units under common control, see the next BR diagrams Dublin Workshop ESSnet Consistency 24-25 April 2012

Redesign of the chain of economic statistics (4) Domestic Legal or natural person Economic/statistical world Legal/administrative world (Domestic) Enterprise group Local (legal) person Enterprise Local unit Statistical units model: Less splitt offs into more Enterprises Dublin Workshop ESSnet Consistency 24-25 April 2012

Redesign of the chain of economic statistics (5) Or in the bottom up model : Domestic Legal or natural person Economic/statistical world Legal/administrative world (Domestic) Enterprise group Local (legal) person Enterprise Local unit More combinations Dublin Workshop ESSnet Consistency 24-25 April 2012

Some register figures (1) Increase and decrease of the numbers must be explained, see arrow. Possible reasons: - real changes - change in definitions or processes - change in coverage by sources Dublin Workshop ESSnet Consistency 24-25 April 2012

Some register figures (2) Total monthly events to be processed in the BR is about 80.000 Dublin Workshop ESSnet Consistency 24-25 April 2012

Some register figures (3) Knowledge on changes in sample frames is very important for survey statisticians Dublin Workshop ESSnet Consistency 24-25 April 2012

A look into the future Legal/administrative world (global) Economic/statistical world (global) Economic/statistical world (sub-global) Legal/administrative world (sub-global) Legal Unit Global Enterprise group Truncated Enterprise group Legal or operational unit (sub global) Global Enterprise SPE SPE Truncated Enterprise Local unit legal or operational Local (legal) unit Local unit Local unit Dublin Workshop ESSnet Consistency 24-25 April 2012

Thank you for your attention Questions? => jhg.ritzen@cbs.nl Dublin Workshop ESSnet Consistency 24-25 April 2012