Ref. Ares(2014)77807 - 15/01/2014
Enterprise publications
2001
Observatory of European SMEs
2002 / No. 1
Highlights from the 2001 Survey
European
Commission
Observatory of European SMEs
2002, No. 1
Highlights from the 2001 Survey
This report has been prepared from information provided by all partners of the European
Network for SME Research ENSR (see Annex II) and was coordinated by Mr. Koos van Elk
and Mr. Peter Brouwer from EIM Business & Policy Research, the Dutch ENSR partner.
The report does not express the Commission's official views; neither the Commission nor
the consultants accept liability for the consequences of actions taken on the basis of the
information contained herein.
OBSERVATORY OF EUROPEAN SMEs
A series of reports submitted to the Enterprise Directorate-General of the European Commission (see also Annex II
to this report) by:
KPMG Special Services and EIM Business & Policy Research in the Netherlands
in co-operation with:
European Network for SME Research (ENSR), and Intomart
For more information on the current series of reports in the framework of The Observatory of European SMEs, see
the website of the Enterprise DG at http://europa.eu.int/comm/enterprise.
Previous Observatory Reports
In the period 1992-1999 six reports of The European Observatory for SMEs were published (comprehensive volumes of 360 to
480 pages each). Each report gives an overview of the structure and developments of the SME sector and looks into a range of
specific areas.
The report published in July 2000 (6th Observatory Report) focused for instance on the markets for products and services, labour
market issues, access to both finance and Community programmes, electronic commerce, and associations and foundations in
the social economy. It also contained in-depth studies on vocational training for SMEs and new services.
The 6th Observatory Report is published in English, French and German. The report is currently out of print, but a limited number of copies are still available. Please send your request to: [email protected].
The first five Annual Reports are still available and can be ordered at: EIM Business & Policy Research, PO Box 7001, 2701 AA
Zoetermeer, The Netherlands. Phone: + 31 (0) 79 3413634, Fax: + 31 (0) 79 3415024, E-mail: [email protected].
These are the abbreviations used in this report for the Europe-19
A
B
DK
D
EL
E
F
FIN
IRL
I
L
Austria
Belgium
Denmark
Germany
Greece
Spain
France
Finland
Ireland
Italy
Luxembourg
NL
P
S
UK
EU
IS
LI
NO
EEA
CH
Europe-19
Netherlands
Portugal
Sweden
United Kingdom
European Union
Iceland
Liechtenstein
Norway
European Economic Area
Switzerland
EEA plus Switzerland
A great deal of additional information on the European Union is available on the Internet. It can be accessed through the Europa server: http://europa.eu.int.
Cataloguing data can be found at the end of this publication.
Luxembourg: Office for Official Publications of the European Communities
ISBN 92-828-2208-7
© European Communities, 2002. Reproduction is authorised provided the source is acknowledged.
Printed in Belgium
Contents
Preface ........................................................................................................ 5
Chapter 1
The Set-up and Structure of the Survey .............................................................. 7
1.1.
Objective ..................................................................................................................... 7
1.2.
Set-up .......................................................................................................................... 7
1.3.
Questionnaire ............................................................................................................. 7
1.4.
Sample Obtained........................................................................................................ 8
Chapter 2
Selected Results of the Survey .................................................................................. 9
2.1.
Introduction................................................................................................................ 9
2.2.
2.3.
Basic Characteristics................................................................................................... 9
Gender of Entrepreneurs........................................................................................... 9
2.4.
Birch Growth Rate for Employment ....................................................................... 10
2.5.
Major Business Constraints ..................................................................................... 13
2.6.
Internationalisation and Development of Competition....................................... 14
2.7.
Business Policies and Management........................................................................ 16
2.7.1.
Business Policies of SMEs ............................................................................................... 16
2.7.2.
Use of Employee Stock Options for Remuneration ........................................................... 18
2.8.
Use of ICT.......................................................................................... 19
Annexes
I
II
Questionnaire..................................................................................................... 25
Names and addresses of the consortium partners ........................ 27
3
4
Preface
Enterprises are at the heart of the strategy launched by the European Council in Lisbon in March 2000. Reaching
the objective of becoming the most competitive and dynamic knowledge-based economy in the world, capable
of sustainable economic growth, more and better jobs and greater social cohesion will ultimately depend on how
successful enterprises, especially small- and medium-sized ones, are.
The Observatory of European SMEs was established by the Commission in December 1992 in order to improve
monitoring of the economic performance of SMEs in Europe. Its task is to provide information on SMEs to policymakers at the national and European level, researchers, SME organisations and to SMEs themselves.
The reports of the Observatory provide an overview of the current situation in the SME sector in Europe through
statistics on the number of enterprises, on total employment and on production by size of enterprise. In addition,
the Observatory reports cover a range of thematic issues.
The Observatory of European SMEs covers 19 countries: the 15 countries of the EU, plus Iceland, Liechtenstein,
Norway and Switzerland.
During 2002, the following reports are planned to be published:
− Highlights from the 2001 Survey
− SMEs in Europe, including a first glance at EU Candidate Countries
− Regional Clusters in Europe
− European SMEs and Social and Environmental Responsibility
− Business Demography in Europe
− High Tech SMEs in Europe
− Recruitment of Employees: Administrative Burdens on SMEs in Europe
− Taxation and SME Growth in Europe
− Highlights from the 2002 Survey
The research for the Observatory reports is carried out on behalf of the Enterprise Directorate-General of the
European Commission by ENSR, the European Network for SME Research, co-ordinated by EIM Business & Policy
Research from the Netherlands in a consortium led by KPMG Special Services from the Netherlands.
For a description of the activities of the Enterprise DG, see the website of the European Commission:
http://europa.eu.int/comm/dgs/enterprise. For more information on the Observatory of European SMEs, including how to access or
order the reports, see: http://europa.eu.int/comm/enterprise/enterprise_policy/analysis/observatory.htm. Information on previous
reports of the Observatory may be found there as well.
5
6
Chapter 1
The Set-up and Structure of the Survey
1.1.
Objective
The ENSR Surveys on small and medium-sized enterprises (SMEs) carried out in the framework of the Observatory
of European SMEs, should contribute to the knowledge of the actual state of affairs in the business sector in
Europe and foster understanding of developments taking place in various fields. Running a survey among more
than 7 600 SMEs across Europe, enables issues such as access to and use of the Internet to be studied, by providing comparable data covering nineteen countries and allowing analyses by basic characteristics of enterprises
which are collected simultaneously.
The data are also used in the production of the Enterprise Scoreboard by the Enterprise DG as well as in the indepth analysis of the various reports of the Observatory. In addition, the data will be made available to a wider
audience by means of the European Observatory CD-Rom (forthcoming).
1.2.
Set-up
The size of the sample was determined by considering the need to report on characteristics of enterprises at
country and size class level simultaneously, with reasonable accuracy and confidence. Estimates at the country or
size class level separately are of course much more precise at the same level of confidence, as there are many more
respondents at these levels.
The 2001 ENSR Survey on SMEs uses a Computer Assisted Telephone Interviewing (CATI) system to collect data
from entrepreneurs and managers within SMEs, all being independent private enterprises with less than 250 em1
ployees in all sectors of industry and in 19 countries (EU plus Iceland, Liechtenstein, Norway and Switzerland) .
The 2001 ENSR Survey on SMEs was carried out from May-August 2001.
1.3.
Questionnaire
The questionnaire 2001 contains 60 questions in nine sections:
1. Screening questions
2. General characteristics
3. Internationalisation
4. Entrepreneurship and management
5. ICT and e-commerce
6. Social and environmental responsibility of SMEs
7. Administrative burdens when hiring employees
8. Taxation and SME growth
9. Stock options.
1
In order to allow conclusions at various levels of aggregation, a minimum number of interviews was aimed at in each of 399 strata defined by 19 countries, 7 sectors
and 3 size classes. The three size classes distinguished are defined in terms of the number of employees: micro (0-9), small (10 -49) and medium-sized (50-249) together labelled SMEs. Large-scale enterprises (LSEs) are those enterprises employing 250 persons or more (for the definit ion of SMEs see also the Recommend ation of
the Commission in: Official Journal of the European Communities No. L 107/6, 1996).
7
Highlights from the 2001 Survey
The questions on social responsibility, on administrative burdens and on taxation (Sections 6, 7 and 8) are designed in particular to provide inputs to three of the reports of the Observatory (see the Preface). The texts of the
questions dealt with in this report are available in Annex I.
1.4.
Sample Obtained
In total 7 662 checked and approved interviews are available. The non-weighted distribution is shown in Table
1.1, by sector and size class. Size class refers to the number of employed persons in 2000 as recorded during the
interview.
Table 1.1:
Number of SMEs interviewed, by sector and size class
Main activity
Number of employees, 2000
0-9
10-49
Manufacturing
Construction
Wholesale
Retail
Transport/communication
Business services
Personal services
Total
Total
50-249
370
407
372
574
290
558
640
507
422
392
263
281
299
317
438
257
228
260
338
202
247
1 315
1 086
992
1 097
909
1 059
1 204
3 211
2 481
1 970
7 662
Source: Unweighted data 2001 ENSR Survey on SMEs.
The overall structure by sector and size class is shown in Table 1.2, applying weights to correct for the nonproportional sampling. These weighted data are used in this report in Section 2, which presents selected results.
Table 1.2 shows that, in terms of number of enterprises, SMEs are dominated by micro enterprises (0-9 employees). Small enterprises (10-49) make up only 6 % of the enterprise population, while medium-sized enterprises
(50-249) account for a minute fraction (see also the explanatory note to Table 1.2).
Statistical data show that the nineteen countries have in total about 20 455 000 enterprises, of which over 19
million are micro (93 %) and 1.2 million are small (6 %). There are only 170 000 medium-sized enterprises (1 %)
and only 40 000 large-scale enterprises (0.2 %). The economic importance of the different size classes is of course
quite different. By employment, the following distribution arises: micro 34 %; small 19 %, medium-sized 13 %
2
(SMEs in total account for 66 %), and large-scale enterprises 34 % .
Table 1.2:
Percentage of SMEs, by sector and size class, weighted sample overall percentages
Main activity
Number of employees, 2000
0-9
10-49
Total
50-249
Manufacturing
Construction
Wholesale
Retail
Transport/communication
Business services
Personal services
9
13
7
20
5
20
19
2
1
1
1
0
1
1
0
0
0
0
0
0
0
11
14
8
21
6
21
20
Total
93
6
1
100
Note:
In each sector, the size class 50-249 employees contains only around 1 % of all enterprises, except in manufacturing where this figure is about 3 %. As a percentage of all enterprises in Europe-19 this is still less than 0.5 %.
Source: Weighted data 2001 ENSR Survey on SMEs.
2
8
Table 2.1 in: European Commission, SMEs in Europe; Observatory of European SMEs; Report submitted to the Enterprise Directorate-General by KPMG Special Services, EIM Business & Policy Research, and ENSR; Brussels, 2002 (forthcoming). The sampling and weighing scheme of the 2001 ENSR Survey on SMEs is actually
based on the data available at the time of preparing the fieldwork from the Sixth Report of The European Observatory for SMEs (2000). However, the structure remains basically the same.
Chapter 2
Selected Results of the Survey
2.1.
Introduction
This chapter presents selected results from the 2001 ENSR Survey on SMEs. The objective is to illustrate the type
of information available from the survey, as well as highlighting some interesting results. The information relates
to six of the nine sections in the questionnaire listed in Section 1.3. Information concerning the sections in the
questionnaire relating to Social and Environmental Responsibility of SMEs; Administrative Burdens and Taxation
and SME Growth are not included, since these issues will be dealt with in depth in specific reports of the Observatory.
The results presented in this report are estimates of the population of all SMEs in nineteen countries as inferred
from weighted results from a representative sample of well over 7 600 responding SMEs (the 2001 ENSR Survey
on SMEs). Where appropriate, reference is made to results obtained in the 1999 ENSR Enterprise Survey, implemented in the framework of the previous Observatory.
2.2.
Basic Characteristics
Almost one quarter of SMEs are sole proprietors mainly in micro enterprises, another half are private limited enterprises. Among small and medium-sized enterprises, a significant percentage of public limited enterprises is
found, 20 and 29 %, respectively.
3
In Table 2.1 the age structure of the enterprises is shown, with enterprises older than 10 years dominating . This
phenomenon is of course reflected in other answers obtained.
Table 2.1:
Age structure of sample (percentage of SMEs)
Age of enterprise
Number of employees, 2000
0-9
10-49
Less than 2 years
2-5 years
6-10 years
More than 10 years
Total
Total
50-249
2
18
20
59
1
7
12
81
0
5
7
88
2
17
19
61
100
100
100
100
Source: Weighted data 2001 ENSR Survey on SMEs.
2.3.
Gender of Entrepreneurs
Currently, women are under-represented amongst entrepreneurs and owners of small businesses. Although the
survey did not contain any specific questions on female entrepreneurship, combining information on the gender
3
The very young enterprises may be under-represented in the sample as the interviews are made by selecting addresses from databases that are in the public d omain. It
takes some time before start-ups find their way to these databases.
9
Highlights from the 2001 Survey
of the respondent and the position of the respondent, it is possible to arrive at an estimate of the incidence of
4
female entrepreneurship in the nineteen countries .
Figure 2.1:
Percentage of female owners in European SMEs, by country
Greece
Austria
United Kingdom
Denmark
Liechtenstein
Norway
Portugal
Ireland
Iceland
Germany
Italy
Sweden
Spain
Switzerland
Finland
Belgium
Netherlands
Luxembourg
France
Europe-19
0%
Note:
5%
10%
15%
20%
25%
30%
35%
This figure is not based on all enterprises surveyed but only on those enterprises for which the gender of the entrepreneur could be established (see main text
and footnote).
Source: Weighted data 2001 ENSR Survey on SMEs.
Twenty two percent of all entrepreneurs are women. Female owners are mainly found in retail, business and personal services (24 %-29 %). The lowest percentage is found in transport and communication (11 %). Figure 2.1
presents the percentage of female entrepreneurs by country. It shows that in six countries over a quarter of SME
owners are female: France, Luxembourg, the Netherlands, Belgium, Finland and Switzerland. The lowest percent5
age is found in Greece, Austria, the United Kingdom and Denmark (14-16 %) . Establishing the gender of the
owner in this extensive enterprise survey allows analyses of various issues by gender as will be demonstrated in
6
Section 2.7 .
2.4.
Birch Growth Rate for Employment
For all enterprises surveyed the number of workers in 1999 and in 2000 has been recorded. As much as 93 to
98 % of all enterprises are classified in the same size class in both years.
It is, however, interesting to classify individual SMEs by growth rates of employment to see whether enterprise
characteristics differ by rate of growth. But how should growth rates across enterprises of different size be compared? Should an enterprise growing from 4 to 5 workers, be classified in the same class as an enterprise growing
from 160 to 200 as both are growing at a rate of 25 %?
4
5
6
10
Results obtained here are based on a sub-sample of 3 025 SMEs. As mentioned in the main text, these results have to be considered as estimates only. There are
several possible reasons why these estimates may differ from figures reported elsewhere. For example results presented on p. 40 of the ‘Benchmarking Enterprise Po licy: Results from the 2001 Scoreboard’, European Commission, SEC (2001) 1900, which are based o n ‘G. Baygan, Improving Knowledge about Women’s Entrepreneurship, Background Report, OECD, 2000 show substantially higher figures for Austria. However these data refer to ‘women entrepreneurs as a percentage of all entrepreneurs’ and are based on OECD labour force statistics. Labour force (i.e. interviewing individuals) and enterprise surveys may lead to different results. In addition,
differences may be due to sample characteristics such as a possible under representation of very small and very young enterprises in the ENSR survey whereas the
OECD figures seem to be based on a sub-sample of the self employed only which may hint at an over representation of smaller enterprises.
Recently the Commission published figures on female entrepreneurship by country based on Labour Force Statistics. European Commission, Enterprise DirectorateGeneral, Competitiveness, innovation and enterprise performance, 2001 edition, Brussels, November 2001 (Graph 47, p. 80). The use of different sources, i.e. enterprise
statistics versus labour force statistics, accounts for substantial differences.
The CD-Rom that will be published in the framework of the Observatory of European SMEs will contain the data from the survey and will allow further analysis by
gender. In Section 2.7 on business policies, two examples are given.
Chapter 2 - Selected Results of the Survey
7
David L. Birch has developed a formula to take such considerations into account . In the Birch formula, the standard growth rate is multiplied by a ‘correction factor’. The result is that a standard growth rate of 25 % for larger
enterprises will be valued ‘higher’ than the same growth rate for smaller enterprises. The correction factor is the
absolute difference of the number of workers from year 1 to year 2.
So, if w1 = ‘number of workers in year 1’ and w2 = ‘number of workers in year 2’, the Birch Growth Rate is: (w2 w1) * ((w2 - w1) / w 1). The Birch Growth Rate for employment, has been used to classify SMEs in four groups:
Value Birch Growth Rate
Classes
Lowest thru -0.15
-0.15 thru 0.15
0.15 thru 1
1 thru highest
Decreasing
Stable
Growing
Fast growing
8
This classification is used :
− By size class: Figure 2.2 shows 9 that among the larger SMEs more individual enterprises show higher Birch
Growth Rates;
− By sector of industry: Figure 2.3 shows that Manufacturing and especially Transport and Communication
have relatively more fast growing enterprises;
− By country: in Figure 2.4 countries are ranked by percentage of growing and fast growing enterprises
combined. Using this yardstick, Greece and the United Kingdom perform best.
It should be realized that these figures only relate to performance of individual enterprises that report their employment figures both for 1999 and 2000. These figures are not directly comparable with macro figures that include many other features such as establishment and closure of enterprises and enterprises passing size class bor10
ders .
Figure 2.2:
Employment growth 1999-2000 (Birch Growth Rates), by size of enterprise
(percentage of SMEs)
0-9
10-49
50-249
0%
10%
20%
Decreasing
30%
40%
Stable
50%
60%
70%
Growing
80%
90%
100%
Fast growing
Source: Weighted data 2001 ENSR Survey on SMEs.
7
8
The Growth index was introduced in: David L. Birch, Job creation in America, The Free Press, New York, 1987 (Chapter 2: p. 36 and Figure 2.4).
It has been verified that these results are robust. If ordinary growth rates are calculated - making it more ‘easy’ for smaller firms to show better performance - still the
larger SMEs show better performance. Also the same two sectors are singled out. The ranking of countries is identical for the top four and the bottom four; other ran kings show minor differences only.
9 Graphs by size class are presented without a total. Because 93 % of all SMEs are micro enterprises with less than 10 workers, the score in such graphs weighted by the
number of enterprises is about equal for micro and total. By omitting the total, size class patterns are more clearly exposed.
10 Figure 2.4 in European Commission, SMEs in Europe; Observatory of European SMEs; Report submitted to the Enterprise Directorate-General by KPMG Special Services, EIM Business & Policy Research, and ENSR; Brussels, 2002 (forthcoming), shows that compared to 1988, employment in 2001 in micro and small enterprises
has clearly increased, whereas the employment level in medium-sized and large-scale enterprises is still below the 1988 level after the significant decrease in the period 1990-1993. Table 2.8 in that report shows that macro (statistical) employment growth in the period 1993-2001 was again highest in micro enterprises. This reflects for example business start-ups, which are not captured by the ENSR Survey.
11
Highlights from the 2001 Survey
Figure 2.3:
Employment growth 1999-2000 (Birch Growth Rates), by sector of industry
(percentage of SMEs)
Manufacturing
Construction
Wholesale
Retail
Transport/comm.
Business serv.
Personal serv.
Total
0%
10%
20%
30%
Decreasing
40%
50%
60%
Stable
70%
80%
Growing
90%
100%
Fast growing
Source: Weighted data 2001 ENSR Survey on SMEs.
Figure 2.4:
Employment growth 1999-2000 (Birch Growth Rates), by country (percentage of SMEs)
Greece
United Kingdom
Liechtenstein
Netherlands
Denmark
Austria
Spain
Norway
Belgium
Portugal
Sweden
Luxembourg
Italy
Ireland
Finland
France
Switzerland
Germany
Europe-19
0%
10%
20%
Decreasing
Note:
30%
40%
Stable
50%
60%
70%
Growing
80%
90%
100%
Fast growing
Data on Iceland are missing.
Source: Weighted data 2001 ENSR Survey on SMEs.
An in-depth analysis of these patterns goes beyond the scope of this publication. However, an explanation to link
the performance of enterprises as measured by the Birch Growth Rate for employment to the business policies
pursued by the entrepreneurs is attempted in Section 2.7.
12
Chapter 2 - Selected Results of the Survey
2.5.
Major Business Constraints
Entrepreneurs have been asked to identify from a series of bottlenecks listed, the single most important constraint
on their business performance over the last two years. Figure 2.5 shows that, especially in the view of somewhat
larger enterprises, ‘lack of skilled labour’ is a major constraint, whereas ‘access to finance’ is perceived to be the
most important constraint by relatively many smaller SMEs.
A similar analysis by sector shows that:
− ‘Lack of skilled labour’ is most important in Construction;
− ‘Access to finance’ is most important in Transport and Communication;
− ‘Administrative regulations’ show a slightly higher score in service sectors (Transport and Communication,
Business and Personal Services) than in industry and trade.
Figure 2.5:
Major business constraint 2001, by size of enterprise (percentage of SMEs)
Lack of skilled labour
Access to finance
Implementing new technology
Implementing new forms of
organisation
Quality management
Administrative regulations
Infrastructure
Introduction of the EURO
Other
None at all
0
5
0-9
10
15
10-49
20
25
30
50-249
Source: Weighted data 2001 ENSR Survey on SMEs.
Some 15 % of the SMEs have other problems than those listed in the survey, whereas another 15 to 20 % report
that they do not have any specific major constraint on their business performance.
11
The ENSR Enterprise Survey 1999 contains a similar question on business constraints. Comparing the results
obtained in 1999 and 2001 for those issues, which are relevant for 5 % or more of all SMEs, allows a view on the
dynamics of the business environment.
Figure 2.6 shows which constraints have become more important and which problems have become less pressing:
12
− ‘Lack of skilled labour’ has increased most. For micro enterprises the i ncrease is 150 % ;
− ‘Access to finance’ and ‘administrative regulations’ are about the same, whereas ‘infrastructure’ has increased about 25 %;
− The share of micro and medium-sized enterprises without any major problem is slightly reduced, whereas
for small enterprises it has increased by 25 %.
11 The questions in 1999 and in 2001 as well as the answer items are identical, except the item ‘implementing new forms of organisation’, which was rephrased.
12 In 1999, 9 % of all SMEs considered this to be the most important problem; in 2001 this figure has more than doubled (21 %). European Commission, The European
Observatory for SMEs - Sixth Report, submitted to the Enterprise Directorate-General by KPMG Consulting, EIM Business & Policy Research, and ENSR, Luxembourg,
2000.
13
Highlights from the 2001 Survey
Figure 2.6:
Major business constraint, index 2001 (1999=100), by size of enterprise
Lack of skilled labour
Access to finance
Administrative regulations
Infrastructure
Other
None at all
0
50
100
0-9
150
200
250
10-49
50-249
Source: Weighted data 2001 ENSR Survey on SMEs.
2.6.
Internationalisation and Development of Competition
Twenty percent of the SMEs are engaged in exports. This percentage increases by size class: micro (19 %), small
(32 %) and medium-sized (46 %). The share of turnover exported does not vary that much with size of firm, from
24 % to 32 %.
50 to 60 % of all SMEs are facing an increase in competition from domestic enterprises over the last 5 years (Figure 2.7). The perceived increase of competition from foreign enterprises is related to firm size, with only 20 %
micro enterprises feeling more competition versus about 45 % for medium-sized enterprises. Only a very limited
number of SMEs report decreasing competition.
Figure 2.7:
Increase in competition over the last 5 years, by size of enterprise (percentage of SMEs)
0-9
10-49
50-249
0
10
20
From domestic enterprises
30
40
50
60
70
From foreign enterprises
Source: Weighted data 2001 ENSR Survey on SMEs.
About one third of all SMEs report an increasing number of international business contacts over the last five years,
ranging from 30 % for micro enterprises to 50 % for medium-sized enterprises.
14
Chapter 2 - Selected Results of the Survey
The same information was collected in the ENSR Enterprise Survey 1999. The percentage of enterprises reporting
an increase in international business contacts, for 1999 and 2001, by country, is shown in Figure 2.8. The countries are ranked by the increase in the year 2001 over the year 1999. In Spain the percentage increased considerably from 21 % to 35 %. In Sweden hardly any change was found at 41 %, whereas in Portugal the percentage
reporting an increase dropped by one third from 32 % to 21 %.
Figure 2.8:
Percentage of SMEs having more international business contacts than 5 years ago,
1999 and 2001, by country
Spain
Greece
United Kingdom
Liechtenstein
Belgium
Netherlands
Germany
France
Iceland
Italy
Switzerland
Austria
Ireland
Luxembourg
Sweden
Norway
Finland
Denmark
Portugal
Europe-19
0
10
20
30
40
1999
Note:
50
60
70
2001
The countries are ranked by the increase in the year 2001 over the year 1999.
Source: Weighted data 2001 ENSR Survey on SMEs.
The same information by the fifteen EU Member States and the non-EU members is summarised in Figure 2.9.
The acceleration has especially taken place in the EU Member States. In 1999 more enterprises in the four non-EU
countries, i.e. Iceland, Liechtenstein, Norway and Switzerland, witnessed an increase in international business
contacts than in the Member States. In 2001 scores have become about equal.
Figure 2.9:
Percentage of SMEs having more international business contacts than 5 years ago,
1999 and 2001, EU and non-EU
1999
2001
0
10
20
Non-EU
30
40
EU
Source: Weighted data 2001 ENSR Survey on SMEs.
15
Highlights from the 2001 Survey
2.7.
Business Policies and Management
2.7.1.
Business Policies of SMEs
The main focus of business policy by size of enterprise is shown in Table 2.2. Micro firms are relatively often entangled in a ‘struggle to survive’. The importance of ’growth’ as a major aim is increasing by size class, for about
30 % of micro enterprises and small enterprises to 38 % for medium-sized enterprises.
Analysis by sector shows that ‘struggle to survive’ is particularly important in Transport and Communication
(29 %), whereas ‘growth’ is the major focus of business policy for about one third of SMEs in Manufacturing and
Wholesale trade.
Countries in which a relatively high number of SMEs aim at growth are: Italy, Greece, Ireland and the United
Kingdom (34 %-41 %), whereas in Austria, Finland and Germany only some 15 % of entrepreneurs aim at
‘growth’.
It is interesting to see whether there are differences between male and female entrepreneurs with regard to the
focus of their business policy. Results tend to suggest that women are slightly more focussed on growth, however
the differences are not significant.
Table 2.2: Main focus of business policy, by size class (percentage of SMEs)
Number of employees
Total
0-9
10-49
Struggle to survive
21
14
8
20
Consolidation
21
21
18
21
Growth
29
30
38
29
Higher profits
9
12
14
9
Higher quality
11
14
12
11
Innovate
7
7
8
7
Other/No answer
2
2
2
2
100
100
100
100
Total
50-249
Source: Weighted data 2001 ENSR Survey o n SMEs.
In Section 2.4 the Birch Growth Rate for employment was introduced. Figure 2.10 analyses to what extent the
business policy of the SMEs is related to the actual performance in terms of employment growth. Those enterprises that have employment growth as their main objective do indeed outperform the others (8 % fast growing,
13 % growing), whereas of the SMEs struggling for survival, 15 % are shrinking.
Figure 2.10: Development of employment, by business strategy
(Birch Growth Rates, percentage of SMEs)
Struggle to survive
Consolidation
Growth
Higher profits
Higher quality
Innovate
0%
5%
Decreasing
Note:
Growing
The class with stable employment (75 % of SMEs) has been left out to bring out the difference more clearly.
Source: Weighted data 2001 ENSR Survey on SMEs.
16
10%
15%
20%
Fast growing
Chapter 2 - Selected Results of the Survey
Nearly 30 % of enterprises reckon ‘growth’ as their main objective, but what does ‘growth’ mean to the entrepreneurs? In the survey entrepreneurs could choose one or more of five alternative interpretations of ‘growth’.
Table 2.3, providing the results by size class, shows remarkably little variation between size classes: growth means
‘increase sales’, ‘strengthen image’ and ‘increase number of employees’, in that order. However, concerning
opening up of new branches, there is quite understandably a clear size class effect.
Trade sectors mainly focus on increases in sales, in construction ‘growth’ is quite often associated with growth in
employment.
In Ireland and Italy ‘growth’ means increasing sales for as much as 85 % of the respondents (more answers allowed). In Greece, Italy and Luxembourg more than half of the entrepreneurs link ‘growth’ to strengthening the
image. Creating new branches is relatively important in Greece for their domestic market, and in Liechtenstein
and Portugal, overseas branches are important.
Table 2.3:
The understanding of growth, by size class (percentage of SMEs)
Number of employees
Total
0-9
10-49
50-249
Increase sales
74
74
79
74
Strengthen the image
38
43
41
39
Increase number of employees
24
24
23
24
Open branches in own country
9
9
14
9
Open branches abroad
3
5
12
3
Other/No answer
8
6
3
7
Note:
As more answers were allowed, columns do not add to 100 %.
Source: Weighted data 2001 ENSR Su rvey on SMEs.
During the Report preparation, checks were made whether the understanding of ‘growth’ is different for male
and female entrepreneurs. For ‘increase sales’, ‘strengthen the image’ and ‘increase number of employees’ there
is no significant difference between men and women. There is also no difference between men and women in
understanding ‘growth’ as ‘opening up new branches in their own country’ (both about 8 %). However, women
are much less likely to think of ‘growth’ as ‘open branches abroad’ (less than 1 %, versus 4 % for men).
The factors on which entrepreneurs consider their enterprise to be competitive are considered in Table 2.4. ‘Customer service’ is the only factor for which micro enterprises consider themselves relatively often competitive,
compared to other size classes.
Table 2.4:
Factors on which enterprises are competitive, by size class (percentage of SMEs)
Number of employees
Total
0-9
10-49
50-249
Price
47
46
52
47
Product or service itself
63
68
73
63
Customer service
75
62
61
64
Location
23
23
26
23
1
1
1
1
1
1
0
1
Other
None
Note:
As more answers were allowed, columns do not add to 1 00 %.
Source: Weighted data 2001 ENSR Survey on SMEs.
For this issue the difference between male and female small-business owners is again analysed. Figure 2.11 shows
that women are more often of the opinion that their business is competitive with regard to price, the product or
service itself and the location.
17
Highlights from the 2001 Survey
Figure 2.11: Factors on which entrepreneurs consider their enterprises are competitive, by gender
(percentage of owners)
Male
Female
0
10
20
Price
30
40
Product or service itself
50
60
70
Customer service
Location
Source: Weighted data 2001 ENSR Survey on SMEs.
2.7.2.
Use of Employee Stock Options for Remuneration
Overall, only some 10 % of SMEs perceive stock options to be a potentially useful instrument for remuneration of
staff. It comes as no surprise that this percentage increases by enterprise size. It is about 20 % for medium-sized
enterprises. Among those who feel it is a potentially useful instrument some 40 % are actually using it and 60 %
are considering starting to do so.
Figure 2.12: Use of employee stock options for remuneration (percentage of SMEs with employees)
0-9
10-49
50-249
0%
10%
20%
No, and no plans to do so
Note:
30%
Excluding 5 % ‘don’t know / no answer’.
Source: Weighted data 2001 ENSR Survey on SMEs.
18
40%
No, but considering to do so
50%
60%
70%
Yes, for executives only
80%
90%
100%
Yes, for a wider group of employees
Chapter 2 - Selected Results of the Survey
For those entrepreneurs who are positive about the instrument, it was asked what is the main motivation for using stock options. ‘Motivate employees’ is by far the most important for all size classes (Figure 2.13), followed by
‘retain key personnel’. There is no real difference by size class.
Figure 2.13: Main motivation to use stock options for remuneration
(percentage of SMEs using or considering to use stock options)
0-9
10-49
50-249
Total
0
Note:
10
20
30
40
50
60
Motivate employees
Easier to attract new employees
Retain key personnel
Save liquidity
Increase financial participation of employees
Other
Excluding 4 % ‘don’t know / no answer’.
Source: Weighted data 2001 ENSR Survey on SMEs.
2.8.
Use of ICT
13
Figure 2.14 shows the share of SMEs that are using various forms of ICT . A clear size class pattern does emerge.
The exception is, of course, ‘device for credit cards’ as here an important sector effect is present. In the retail sector, which is private-customer oriented, the penetration rate of the credit card device is 58 %. The use of mobile
phones is quite widespread, reported by almost 80 % of micro enterprises, and by more than 90 % of mediumsized enterprises.
13 See also the recent publication ‘Competitiveness, innovation and enterprise performance ’, for more figures from the 2001 ENSR Survey on SMEs on Internet use. 2001
edition, European Commission, Enterprise Directorate-General, Brussels, November 2001.
19
Highlights from the 2001 Survey
Figure 2.14: Forms of ICT used, by size of enterprise (percentage of SMEs)
Device for credit cards
Mobile phones
Using stand-alone PCs
Network of PCs
E-mail / Electronic Data Interchange
Intranet
Internet connection
Own website
None of these
0
10
20
30
40
50
0-9
60
70
80
10-49
90
100
50-249
Source: Weighted data 2001 ENSR Survey on SMEs.
The majority of SMEs use stand-alone PCs, and PCs in networks (more answers were allowed, see Figure 2.14). By
combining this information additional insight can be provided. Table 2.5 shows for example that 21 % of the
14
micro enterprises are operating without a PC . The size class pattern is clear.
Table 2.5:
Use of stand-alone PCs and PCs in networks, by size class (percentage of SMEs)
Number of employees
0-9
10-49
No stand -alone PC and no network
Stand -alone PC, but no network
No stand -alone PC, but network
Stand -alone PC and network
Total
Total
50-249
21
26
20
33
9
18
20
53
5
7
17
70
20
26
20
34
100
100
100
100
Source: Weighted data 2001 ENSR Survey on SMEs.
By making comparisons with the results of the ENSR Enterprise Survey 1999 it is possible to study to which extent
the access to Internet of SMEs has changed in the period 1999-2001. Figure 2.15 shows that smaller enterprises
are rapidly catching up. The increase in the percentage for the micro enterprises in this 2-year period is as high as
75 %. Still, the situation in 2001 reflects a clear size class effect.
14 The link between Figure 2.14 and Table 2.5 can be explained as follows: 26 % of all micro enterprises use only a stand-alone PC, whereas an additional 33 % use both
stand-alone PCs and a network (Table 2.5). The total of 59 % is shown in Figure 2.14.
20
Chapter 2 - Selected Results of the Survey
Figure 2.15: Access to Internet 1999 and 2001, by size of enterprise (percentage of SMEs)
0-9
10-49
50-249
0
10
20
30
40
50
60
70
Access 1999
80
90
100
Access 2001
Source: Weighted data 2001 ENSR Survey on SMEs.
Figure 2.16 shows that the large differences that existed between sectors of industry in 1999 have been considerably reduced. In 2001 70 % of SMEs in all sectors tend to have access to the Internet, only in business services
is a considerably higher score found (80 %).
Figure 2.16: Access to Internet 1999 and 2001, by sector of industry (percentage of SMEs)
Manufacturing
Construction
Wholesale
Retail
Transport/comm.
Business serv.
Personal serv.
Total
0
10
20
30
Access 1999
40
50
60
70
80
90
100
Access 2001
Source: Weighted data 2001 ENSR Survey on SMEs.
Access to Internet by country shows a more varied pattern (Figure 2.17). Several countries that had low Internet
access rates for SMEs in 1999 are catching up fast, such as Greece, Italy, Spain and the United Kingdom. Especially the performance of Greece, from only 24 % to 78 %, is astonishing. Portugal is growing at a rate well above
the average, but finds itself still in last place in 2001. Other countries such as Denmark, France and the Netherlands are growing at a rate below average, and are at a level below the average in 2001.
21
Highlights from the 2001 Survey
Figure 2.17: Access to Internet 1999 and 2001, by country (percentage of SMEs)
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Iceland
Ireland
Italy
Liechtenstein
Luxembourg
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
Europe-19
0
10
20
30
40
50
60
70
Access 1999
80
90
100
Access 2001
Source: Weighted data 2001 ENSR Survey on SMEs.
In Figure 2.15 it was shown that 70 to 90 % of SMEs of various sizes have access to the Internet. To end this section, two more issues are analysed. First, for non-users, the single most important reason for not using the Internet is shown (Table 2.6). ‘Non-suitability of Internet’, ‘lack of personnel’, and ‘expected non-profitability’ are the
main reasons reported by SMEs not using the Internet.
Table 2.6: The single most important reason for not using the Internet to sell products or services, by
size of enterprise (percentage of SMEs not using the Internet)
Number of employees
Total
0-9
10-49
50-249
No skilled personnel
17
20
16
17
It would not pay off
18
14
16
18
Do not trust technology/security
3
2
3
3
No confidence in regulatory environment
1
1
2
1
National differences in consumer protection
0
4
0
1
Cost of product distribution too high
2
2
0
2
Customers' access to Internet is insufficient
Does not apply to my type of enterprise/product
Don't know/No answer
Total
6
9
5
6
43
40
40
43
9
9
18
9
100
100
100
100
Source: Weighted data 2001 ENSR Survey on SMEs.
Second, for the connected SMEs, it was investigated what type of commercial use they make of the Internet. The
results are shown in Figure 2.18. Quite obviously, distribution of information is the major category, however 30
to 40 % receive orders through the Internet. About 15 % of the SMEs are in a position also to deliver products or
services via the Internet.
22
Chapter 2 - Selected Results of the Survey
Figure 2.18: Commercial use made of the Internet, by size of enterprise
(percentage of SMEs using the Internet, more answers allowed)
Distribute information on products
Receiving orders
Order confirmation
Delivering product
None of these
0
10
0-9
20
30
40
50
10-49
60
70
80
90
100
50-249
Source: Weighted data 2001 ENSR Survey on SMEs.
23
Highlights from the 2001 Survey
24
Annex I
Questionnaire
In total the questionnaire contains 9 sections with questions numbered from X1 to X60. As one question was
deleted after the pilot test the questionnaire actually contains 59 questions.
Section 1
Section 2
Section 3
Section 4
Section 5
Section 6
Section 7
Section 8
Section 9
Screening questions (5 questions)
General characteristics (5 questions)
Internationalisation (5 questions)
Entrepreneurship and management (4 questions)
ICT and e-commerce (4 questions)
Social and environmental responsibility of SMEs (10 questions)
Administrative burdens when hiring employees (11 questions)
Taxation and SME growth (12 questions)
Stock options (3 questions)
In this survey report only a selection of the data collected has been presented. The Enterprise DG also uses the
data from the survey in the production of the Enterprise Scoreboard. The data from Sections 6, 7 & 8 are not
presented in this survey report because they will be used in the in-depth analysis of three specific reports to be
published in the framework of the Observatory. In addition, data derived from all questions will be made available
to a wider audience by means of the European Observatory CD-Rom (forthcoming).
Therefore, the list on the next page contains only the 22 questions that are relevant for the information provided
in this report. The full questionnaire used, i.e. including all answer items and routing instructions, will be made
available by means of the European Observatory CD-Rom (forthcoming).
25
Highlights from the 2001 Survey
Selected questions from the questionnaire
Section 1 Screening questions
X1
Is your business an independent enterprise or a subsidiary of another enterprise?
X2
What is your position within the enterprise?
X3
[INT: NOTE DOWN GENDER OF RESPONDENT]
X4
What is the main activity of your enterprise in terms of turnover?
X5
How many people did your enterprise employ on average during 2000?
Section 2 General characteristics
X6
And how many people did your enterprise employ on average during 1999?
X8
How many years has your enterprise been in operation before 2001?
X11 Which of the following factors has been the major constraint on your business performance over the last
two years?
Section 3 Internationalisation and growth
X12 Did your enterprise have any exports in 2000?
X13 And could you indicate the percentage of exports to total turnover for the year 2000?
X14 Have you faced an increase or a decrease in competition from domestic enterprises over the last five years?
X15 Have you faced an increase or a decrease in competition from foreign enterprises over the last five years ?
X16 Do you have more international business contacts than you did 5 years ago?
Section 4 Entrepreneurship and management
X18 What has been the main focus of your enterprise policy recently?
X19 What does ‘growth’ mean to your enterprise?
X20 On which factors do you consider your enterprise to be competitive?
Section 5 ICT and E-commerce
X21 Which of the following forms of ICT does your enterprise use?
X22 What is the single most important reason why your enterprise has not used the Internet to sell its products
or services?
X24 For which of the following commercial activities does your enterprise use the Internet?
Section 9 Stock options
X58 Do you use or plan to use employee stock options as a remuneration instrument?
X59 What is your main motivation to use stock options for remuneration?
X60 What is your main motivation not to use stock options for remuneration?
26
Annex II
Names and addresses of
the consortium partners
Organisation
Address
Telephone
Telefax
Contact person
KPMG Special Services
PO Box 74500
1070 DB AMSTERDAM
The Netherlands
http://www.kpmg.nl
31 20 6567890
31 20 6567700
Michael Veltman
[email protected]
EIM Business & Policy
Research
PO Box 7001
2701 AA ZOETERMEER
The Netherlands, and:
Avenue des Arts 41, box 4
1040 BRUSSELS
Belgium
http://www.eim.nl
31 79 3413634
31 79 3415024
Rob van der Horst
[email protected]
PO Box 10004
1201 DA HILVERSUM
The Netherlands
http://www.intomart.nl
31 35 6258411
31 35 6246532
Intomart
32 2 5100884
32 2 5100885
Atty Smit
[email protected]
ENSR - European Network for SME Research
Austria
Austrian Institute for Small
Business Research (IfGH)
Gusshausstrasse 8
1040 VIENNA
http://www.ifgh.ac.at
43 1 5059761
43 1 5034660
Thomas Oberholzner
[email protected]
Vrijheidslaan 17
1081 BRUSSELS
http://www.kubrussel.ac.be/index2.html
32 2 4124211
32 2 4124200
Dr. Rita Wardenier
[email protected]
PO Box 141
2630 Taastrup
COPENHAGEN
http://www.uk.teknologisk.dk
45 7220 2000
45 7220 2707
Frank Skov Kristensen
[email protected]
Finland
Small Business Institute, Turku
School of Economics and
Business Administration
PO Box 110
20521 TURKU
http://www.tukkk.fi/sbi
358 2 3383548
358 2 3383393
Ulla Hytti
[email protected]
France
Association pour la Promotion
et le Développement Industriel
(APRODI)
Boîte Postale 151.16
75764 PARIS Cedex 16
http://www.aprodi.com
33 1 47275149
33 1 47275150
Jean-François Papin
[email protected]
Maximilianstrasse 20
53111 BONN 1
http://www.ifm-bonn.org
49 228 729970
49 228 7299734
Dr. Sanita Schröer
[email protected]
Ipsilantou 130
PIRAEUS 185 32
http://www.unipi.gr
30 1 4142280
30 1 4142629
Professor Petros Livas
[email protected]
Kalkofnsvegi 1
150 REYKJAVIK
http://www.ths.is/eng/natec/natecins.htm
354 569 9500
354 562 6540
Sigurdur Gudmundsson
[email protected]
Belgium
Small Business Research
Institute, K.U. Brussel
Denmark
Danish Technological Institute
(DTI)
Germany
Institut für Mittelstandsforschung (IfM)
Greece
University of Piraeus
Iceland
National Economic Institute of
Iceland (NEI)
27
Highlights from the 2001 Survey
Organisation
Address
Telephone
Telefax
Contact person
4, Burlington Road
DUBLIN 4
http://www.esri.ie
353 1 6671525
353 1 6686231
Dr. Eoin O’Malley
[email protected]
Viale Filippetti 9
20122 MILAN
http://www.uni-bocconi.it/bocconi/
ricerca/ centri/csi/csi4.htm
39 02 58363709
39 02 58363792
Professor Giul iano Mussati
cscicogna@uni -bocconi.it
[email protected]
Via Appia Pignatelli 62
00178 ROME
http://www.tagliacarne.it
39 06 780521
39 06 7842136
Paolo Cortese
[email protected]
Kirchlistrasse 44
9010 St. GALLEN
http://www.igw.unisg.ch
41 71 2430700
41 71 2430701
Walter Weber
[email protected]
Boîte Postale 1604
1016 LUXEMBOURG
http://www.cdm.lu
352 4267671
352 426787
Marc Gross
[email protected]
PO Box 7001
2701 AA ZOETERMEER
http://www.eim.nl/
31 79 3413634
31 79 3425786
Koos van Elk
[email protected]
Serviceboks 415
Gimlemoen
4604 KRISTIANSAND
http://www.agderforskning.no/
english/index.htm
47 381 42200
47 381 42201
Dr. Per-Anders Havnes
[email protected]
Rua Rodrigo da Fonseca, 73-2e
1296-158 LISBON
http://www.iapmei.pt
351 21 3836000
351 21 3836234
José Luis Santos
[email protected]
Avda. de la Libertad 20-3
20004 SAN SEBASTIAN
http://www.ikei.es
34 943 426610
34 943 423501
Iñigo Isusi
[email protected]
Sweden
Swedish National Board for
Industrial and Technical
Development (NUTEK)
117 86 STOCKHOLM
http://www.nutek.se
46 8 6819100
46 8 6819118
Henrik Levin
[email protected]
Switzerland
Schweizerisches Institut
für gewerbliche Wirtschaft
an der Universität St. Gallen
(IGW); Observa St. Gallen
Kirchl istrasse 44
9010 St. GALLEN
http://www.igw.unisg.ch
41 71 2430700
41 71 2430701
Margrit Habersaat
[email protected]
32, Rue de l’Athénée
1206 GENEVA
http://www.ecodiagnostic.ch
(under construction)
41 22 7891422
41 22 7891460
Dr. Alain Schoenenberger
[email protected]
COVENTRY CV4 7AL
http://users.wbs.warwick.ac.uk/csme
44 24 76523692 Professor David Storey
44 24 76523747 [email protected]
Ireland
The Economic and Social
Research Institute (ESRI)
Italy
CREA ‘Furio C icogna’
Università Bocconi
Italy
Istituto Guglielmo Tagliacarne
Liechtenstein
Schweizerisches Institut für
gewerbliche Wirtschaft an der
Universität St. Gallen (IGW)
Luxembourg
Chambre des Métiers du
Grand-Duché de Luxembourg
The Netherlands
EIM Business & Policy Research
Norway
AGDER Research Foundation
(ARF)
Portugal
Instituto de Apoio às Pequenas
e Médias Empresas e ao
Investimento (IAPMEI)
Spain
Instituto Vasco de Estudios e
Investigación (IKEI)
Switzerland
Eco’Diagnostic; Observa
Geneva
United Kingdom
Centre for Small and Medium
Sized Enterprises, University
of Warwick
United Kingdom
Centre for European and
International Consultancy,
Leicester Business School,
De Montfort University
28
The Gateway
44 1162 506293 Julian Hancock
LE1 9BH LEICESTER
44 1162 577264 [email protected]
http://www.dmu.ac.uk/Faculties/BL/ CEIC.html