Needs from a user perspective; Statistical Needs from a Non-European/APEC perspective Workshop on improving Statistics on SMEs and Entrepreneurship Paris 16 – 18 September 2003 Dr Chris Hall Macquarie Graduate School of Management, Australia

1. SME and Entrepreneurship Statistics - user willingness to pay. 2. User needs - a framework for priorities 3. Ways forward - initiatives for better meeting user needs

1. SME and Entrepreneurship Statistics - user willingness to pay. There are about 50 million SMEs in APEC, and about 100 million worldwide Users are simply not willing to pay even $1 per SME for statistics on SMEs It thus is necessary to establish priorities, and to find ways of more cost effectively meeting user needs.

billion 39 million % jobs 60% 20% 21% 19% latest (1999) 2.5 billion 48 million % firms 98% 73% 20% 5% people SMEs (est. non agric) % private jobs in SMEs all SMEs <5 employees micro employees small medium There is no common definition of an SME in APEC SMEs in APEC % of firms with less than 5 people, although structurally these only provide 20% of employment The average SME in APEC employs about 7 people

Australia New Zealand Chile Peru Mexico USA Canada Russia China Chinese Taipei Hong Kong Vietnam Thailand Philippines Brunei PNG Malaysia Singapore Indonesia Japan Korea 2020 Economies and 2010 Economies in APEC

micro small medium large % of private jobs Micro enterprises (employing < 5) are more important in 2020 economies, where they contribute 40% of private sector jobs. SMEs (<100) in 2020 economies contribute a higher proportion of jobs (75%), as against only 60% of jobs in 2010 economies.

2. User needs - a framework for priorities Demand side Govt policy Govt program Large firm SMEs SME organisations Researchers Supply Side Structural Dynamic Special Issues Attributes comparability - across borders, time veracity/reliability comprehensiveness/accuracy timeliness cost effective to collect minimum red tape effect ethics/privacy issues

2. User needs - a framework for priorities Demand side Government policy Government program Large firm SMEs SME organisations Researchers Supply Side Structural Dynamic Special Issues Attributes comparability - across borders, time veracity/reliability comprehensiveness/accuracy timeliness cost effective to collect minimum red tape effect ethics/privacy issues main user priorities trade offs

The lowest cost improvements can be made to simple Structural statistics (number of SMEs, broken down by size class, number employed etc), but these are not high on user priorities. Dynamic aspects (eg exit entry, firm growth, relative competitiveness and productivity improvement etc) usually higher priority, but more expensive Special issues are usually dealt with by means of special surveys undertaken by specific economies. Usually highest priority, user driven, but hard to compare

3. Ways forward - initiatives for better meeting user needs 3.1 Develop agreement on common size classes for data collection purposes in APEC in conjunction with OECD/Eurostat. 3.2 Focus more on Indicators. 3.3 Collaborate on the identification and researching of common issues on a rolling five year basis. 3.4 Pursue more cost effective ways of collecting statistics and reducing the administrative burden on SMEs.

Monitoring the Entrepreneurial Environment: Entrepreneurship Indicators Proposed Initiative: Ministers recommend the development of an internationally comparable set of indicators for ongoing and regular monitoring of the level of entrepreneurial activity in each country, and of the entrepreneurial environment in each country. To develop appropriate policy strategies and initiatives, policy makers need to make decisions which are essentially political compromises. Governments now need to have much better capability for monitoring of their Entrepreneur Profile, Entrepreneur Activity, and Entrepreneurial Business Environment. 3.2 Focus more on Indicators.

3.3 Collaborate on the identification and researching of common issues on a rolling five year basis. All of the European members of the SME Observatory, and nine of the 21 non European APEC economies are already carrying out ad hoc surveys of specific issues, it makes some sense to develop a program of collaboration between agencies to identify ways that more comparable and useful information could be obtained.

3.4 Pursue more cost effective ways of collecting statistics and reducing the administrative burden on SMEs. eg Use business registration, linked to VAT data, to allow low cost monitoring of SME value added, exports etc at quarterly updated levels, by region, activity, industry, longitudinal data worldwide single registration and access better compliance, risk management, credit assessment on cashflow etc