Eurostat European profiling: a crucial tool in the current European developments on statistical units D. FRANCOZ Eurostat J OINT UNECE/OECD/E UROSTAT MEETING OF THE GROUP OF EXPERTS ON BUSINESS REGISTERS 3-4 September 2013, Geneva Session 3: The role of the statistical business register in the modernisation of the statistical production and services

Eurostat Background  MEETS 4-year program to modernise business statistics ESSnet profiling ESSnet consistency  Conclusion: need to change the statistical implementation of the economic definition of enterprise  Current projects: Revision of the regulation on statistical units has started  Include implementation rules Implementation of European profiling is going on  For the largest 500 groups in Europe

Eurostat A new model of statistical units  To increase consistency between European countries in business statistics The current definition of the enterprise is not applied homogeneously in all EU countries In a lot of countries, the legal unit is used as a proxy of the enterprise  To take into account the globalisation of the economy Current regulation on statistical units in force since 1993 The current implementation of the enterprise' definition does not take into account the global dimension of the enterprises Statistics based on current enterprise are describing artifacts, and are diverging from economic reality Why?

Eurostat A new model of statistical units  To take into account the globalisation of the economy (cont'd) Indicators based on the legal units can lead to misinterpretation in the frame of global enterprise groups  Misclassification of economic variables according to the NACE activity code  Double counting for some non-additive variables  indicators relating 2 economic variables which are not “managed” in the same legal unit  2 dimensions to be taken into account: To improve the relevance of national business statistics in the European countries To produce better EU statistics Why?

Eurostat Organisation of enterprise groups  Economic organisation at the worldwide level  Global dimension: refers to the strategy of the group  Local dimension: refers to constraints  Splitting up of the production into several legal units In order to:  Reduce costs  Increase competitiveness multinational

Eurostat The new model of statistical units  Takes into account both domestic and global entities  Top down approach to delineate the enterprises 2 geographical levels of enterprises:  The global enterprise  The truncated enterprise

Eurostat The new model of statistical units

Eurostat The new model of statistical units

Eurostat The new model of statistical units

Eurostat The new model of statistical units

Eurostat The new model of statistical units

Eurostat The new model of statistical units

Eurostat The new model of statistical units

Eurostat The new model of statistical units Allows both national approach And EU approach For data collection

Eurostat The new model of statistical units 3 types of delineation: Use of existing data  1 Legal unit=1ENT  93% of LeUs Automatic procedures  Small or simple groups (DEG or GEG)  5% of LeUs Profiling  Large and complex groups (DEG or GEG)  2% of LeUs

Eurostat European profiling Main features  Central definition of the global and truncated enterprises The country of the headquarters profiles for all the countries involved  2 main options for collecting data on the enterprises National collection (main option)  The partnering NSIs assess the enterprises defined by the country of the headquarters –Delineation and characteristics –Feasibility of data collection Central collection (for a long term perspective)

Eurostat Profiling implementation A collaborative process 3 types of cooperation

Eurostat Profiling implementation A collaborative process 1-With the Group 2-Within NSI: between profilers and Business statisticians 3-Between profilers in different NSIs

Eurostat European profiling European strategy  Central organisation to help the NSIs Development of a web platform: the IPT  For profilers to exchange information on groups under profiling  For statistical users to access information on enterprises in profiled groups Development of rules to smoothen the process  Calendar for profiling cycle  Support to NSIs in establishing an agreement for data collection with the groups

Eurostat European profiling Benefits  European Statistical System-wide gains The country of the headquarters profiles for all the countries involved Enterprises of one group are defined consistently for all European business statistics Centrally defined enterprises made available for all national statistics  Benefits for respondents Profilers and the group talk the same language NSIs offer the group a central contact point Profiling decreases the response burden for a group

Eurostat Example 1

Eurostat Example 2

Eurostat Thank you for your attention