1. Task Force on Small and Medium Sized Enterprise Data (SMED)
UK presentation on:
Producing estimates on SMEs: National level
Producing estimates on SMES: Regional data & issues to consider

2. Information Note
Figures used in the analysis do not match exactly to previously delivered estimates. They are used as development work to assess the feasibility of producing SME data from register/survey sources. They should NOT:
Be compared directly to previously delivered estimates
Be circulated outside of the task force meeting
This analysis does not take account of differences between SBS & BD estimates

3. Producing estimates on SMEs: National level

4. Definition of SMEs There are three broad parameters which define SMEs:
Micro enterprises have up to 10 employees
Small enterprises have up to 50 employees
Medium-sized enterprises have up to 250 employees
The European definition of SME follows: "The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro."

5. Definition used for SMEs
Size class
Persons employed
Annual T/O
SMEs
Micro-enterprises
Up to 9
Up to £2m
Small enterprises
Up to 49
Up to £10m and no micro enterprise
Medium enterprises
Up to 249
Up to £50m and no small enterprise
Large enterprises
> 249
> £50m
Can only base SMEs on employment and T/O
T/O is based on £ as opposed to €
using a pre-defined conversion rate can be implemented – would need to consider impact of currency changes
Based on ‘reporting unit’ – if part of a larger business not taken account of (not feasible to produce using current survey methods; might impact on businesses moving between categories)

6. SMEs – diagram to show breakdown

7. Reporting the number of SMEs
Two potential options:
Register source – Business Register (IDBR)
Easier to produce & provides good estimate of number of businesses but not best approach to ‘other variables’
Survey Source – SBS regulation
Can ‘better’ estimates for the variables (such as turnover, aGVA etc) due to methodology accounting for non-sampled units (however, still not totally optimal unless sample on the required basis)
(if countries have an administrative approach to provide data under SBS then may be easier)

8. Use of register data - IDBR
Use register information - data point in time
Not consistent with Business Demography (but same principle applies)
Different definitions (i.e. not those businesses active during the year)
Only those businesses in scope for the survey (used for SBS regulation)
Does not include information for Northern Ireland – for purpose of analysis only (can be included)
Produce count, turnover & employment for each SME classification
Produce different aggregation, can be subdivided by Industry & Legal Status

9. High level figures from Register
Definition
Number
Employment
(thousands)
Turnover (£’billion)
Micro
(0-9 emp & <£2m t/o)
1,726,300
4,145
308
Small
(10-49 emp & <£10m t/o)
206,300
3,628
353
Medium
( emp & <£50m t/o)
38,600
3,175
411
Large
(>250 emp & >£50m t/o)
10,100
10,419
2,509
All
1,981,400
21,366
3,581

10. Industry level figures – Register Number of businesses

11. Industry level figures – Register Turnover & Employment

12. Use of survey data - SBS regulation
Use of returned contributor data (and imputed data for large businesses)
Survey samples 65,000 businesses (approx.)
SME definition based on ‘registered’ not ‘returned’
Aggregated using design & calibration weights to approximate for the whole non-financial business economy
Weighting based on different stratification so not optimal
Produce aggregated counts, turnover & aGVA for each SME classification
Employment collected as part of a different survey but same principle could be applied; similarly for purchases
Produce summary statistics by Industry & Legal Status

13. High level figures from Survey (SBS)
Definition
Number
aGVA
(£’billion)
Turnover (£’billion)
Micro
(0-9 emp & <£2m t/o)
1,768,900
165
331
Small
(10-49 emp & <£10m t/o)
211,500
161
375
Medium
( emp & <£50m t/o)
38,400
158
410
Large
(>250 emp & >£50m t/o)
10,100
562
2,541
All
2,029,000
1,046
3,657
aGVA & turnover is analysed but other variables collected as part of the SBS regulation could also be produced

14. Industry level figures – Survey (SBS)

15. Caveats when using the different sources - reminder
Relevant to both:
Balance sheet information is not available so cannot be stratified by this
Turnover (T/O) definitions for the UK need to be based on £ as opposed to €
Data is not totally consistent between SBS & BD (consistency as previously mentioned at SBS WG)
Relevant to Register data
Only count, employment & T/O data can be calculated
T/O & employment data updated based on different rules and periodicity
Relevant to Survey data
Survey not optimally designed for estimation at levels provided
T/O & employment breakdown based on registered figures not actual figures – what approach should be used?

16. Summary It is (broadly) feasible to produce estimates for SMEs
This can be done for industry & legal status splits
There are differences between register counts & survey counts due to timing
The optimal source for information on SMEs is:
Data from the register for counts of businesses;
Data supplied as part of the SBS regulation for all ‘other’ variables required (T/O, Employment, Purchases) - but need to be aware of the caveats
The approach used is suitable at higher levels of aggregation
The more detail required the higher the associated CVs would be (impact on the quality) e.g. if split further by balance sheet, legal status & industry etc
This would be relevant at higher levels if balance sheet information was also included as a stratification

17. Next steps for work/analysis
Assess the quality & confidentiality of the estimates produced
Calculate associated CVs for the SMEs (relevant if using survey sources)
Help to determine an appropriate level of detail that can be produced (relevant if using survey data as opposed to admin/register data)
Produce estimates for further time periods
Produce estimates for additional variables (based on requirements)
Employment, purchases etc

18. Producing estimates on SMES: Regional data & issues to consider

19. Information Note
Figures used in the analysis do not match exactly to previously delivered estimates. They are used as development work to assess the feasibility of producing SME data from register/survey sources. They should NOT:
Be compared directly to previously delivered estimates
Be circulated outside of the task force meeting

20. Issues when considering regional estimates
How to deal with multi site businesses
Should the reporting address be used to produce estimates?
Should estimates be produced based on site level information?
Difference would be those small businesses with more than one site in different geographical areas – is this very common?
Adding an extra level of disaggregation
Adding regional dimension to SME definition will add a further level of detail
At NUTS1 level should be reasonably robust (need further analysis on quality though); lower levels of geography more scope for variability
Is the business part of a larger business?
More difficult to identify & handle especially in survey results
Not possible to produce without significant work/analysis

21. Additional issues/caveats
Analysis looks at just the overall business level (will not be consistent with the regional data currently provided – which is based on site level)
Not be significant impact for the ‘smaller’ businesses
For the survey data used the definition for turnover and employment based on the registered values not the returned values
To do based on ‘returned data’ would be very difficult to produce appropriate estimates for a survey (this might impact on those businesses that move between different categories)

22. How many SMEs are single site?
Definition
Average number of sites
Micro
1.01
Small
1.17
Medium
2.39
Large
24.46
(As expected) Micro businesses mainly single site
Average for small & medium businesses also low
If interested in just SMEs not significant issue to use ‘whole’ business as opposed to site level

23. Average number sites by emp & T/O
Reporting address effect is evident in companies with more than 250 emp & affected more by emp than T/O
As a proxy, the business as a whole can be used for calculating SMEs with limited reporting address effect

24. High level figures from Register

25. High level figures from Survey (SBS)

26. Summary
It is (broadly) feasible to produce regional estimates for SMEs
Can be produced at NUTS1 and at lower geographical levels (though quality would need to be assessed)
Reporting address of the business does not appear to have a significant impact for SMEs as ‘mainly’ single site
Certainly not at NUTS1 level; lower level of geography required would (might) have an increasing impact
Register data would again be the preferred source for counts of businesses at regional level and data provided as part of the SBS regulation (survey data for UK) the source for ‘other’ variables (turnover etc)
There are differences between register and survey business counts due to timing

27. Next steps
Need to assess the quality & confidentiality of the estimates
Survey for UK optimised to produce regional (NUTS1) estimates so quality should not be (significant) issue
IF estimates required at lower geographical breakdown then would have increasing impact
Produce estimates for site level
This would fully assess the impact of site against reporting address
Would produce a consistent figure with what is delivered as part of the SBS regulation
Produce estimates for time series & additional variables
Expand the analysis to include variables such as purchses, employment etc