REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL concerning the Implementation of the Council Regulation (EC, Euratom) N° 58/97

Summary and Recommendations

This report covers the implementation of Council Regulation No 58/97 (hereafter referred to as "the SBS Regulation") and Council Regulation No 410/98 that has subsequently amended it. This report has been prepared under the provisions of Article 14 (1) of the SBS Regulation: "The Commission shall, within three years of the date of entry into force of this Regulation and again every three years thereafter, submit a report to the European Parliament and the Council on the statistics compiled pursuant to this Regulation and in particular on their quality and the burden on business." [1]

[1] According to that provisions a first report was communicated the 10 November, 2000 (COM(2000) 719 final)

More generally, the report aims to provide information about the manner and extent to which each of the Member States have implemented the SBS Regulation as well as to report on the actions undertaken by the Commission to work towards the aim of producing comparable European structural business statistics.

The report is structured into four parts followed by a number of reference annexes. These are preceded by main diagnosis and conclusions: they provide a brief summary of the state of implementation in the Member States, followed by certain recommendations. Then part one looks at the actions taken to implement the SBS Regulation. The second part looks at the statistics resulting from the implementation. The third part looks at issues related to cost and burden related to the collection of SBS data. The fourth part looks to the future at the way Structural Business Statistics may move forward.

The annexes provide more detailed information relating to points raised in the report. They also provide information on SBS data availability in credit institutions and pension funds (Annex 7) that are not covered fully by the SBS Regulation, and at the availability of SBS data in Candidate countries (Annex 8).

Meeting the objective [2] of the SBS regulation

[2] The objective of the SBS regulation according its first Article is "to establish a common framework for the collection, compilation, transmission and evaluation of Community statistics on the structure, activity, competitiveness and performance of businesses in the Community".

The framework for the production of SBS sets a number of targets (in terms of data availability, coverage, freshness of data, etc.). It is by them that the effectiveness of the implementation of the SBS regulation must be judged. The analysis is based on the situation at the end of 2002, immediately systematic comparisons between reference years 1996 and 2000 became available.

Regulatory evolutions: the SBS regulation and related legislation are described in Part I. Since the adoption of Regulation No 58/97 and its implementation modules, three major regulatory developments have followed.

1) a first amendment was adopted by the Council and the European Parliament and published on 21 February 1998. It added a fifth annex concerning a framework for structural business statistics for life and non-life insurance activities starting with the 1996 reference period.

2) an adaptation process was implemented in 2001 using the Comitology procedure. It aimed at reducing or at least containing the statistical burden by removing less useful parts of the requirements, offering room for new investigations or developments of the SBS Regulation in the future; this amendment was adopted on 6 September 2002; the impact of this adaptation is analysed in Chapter 3.1.

3) a second amendment was adopted by the Council and the European Parliament and published on 21 November 2002. This amendment essentially added two new annexes concerning credit institutions and pension funds, and two variables related to expenditure on environmental protection. The progress made within this framework is addressed in Annex 7.

Data Availability: the major result is that between the two reference years there was a dramatic improvement in the volume of data available. On average the availability ratio for sixteen countries and for the main series has increased from 54 % to 82 % [3]. All countries have made implementation efforts (an overview of efforts made since reference year 1997 is presented in Chapter 1.3) and have seen an overall improvement in their position in both industrial and services sectors. However efforts remain still to be made in some specific countries and globally in some specific sectors (the insurance and the construction sectors).

[3] The annual "enterprise" series for 15 Member states and Norway

Confidentiality: this remains a concern for EU business statistics: data dissemination for the EU as a whole is limited by problems of statistical confidentiality. However good progress has been made in this area compared to the situation described in the first report. First the harmonisation of national confidentiality rules has improved. Secondly, IT investments in tools for the automatic treatment of confidentiality have been made with the co-operation of National Statistical Institutes. At least setting up a new estimation strategy has made it feasible to increase substantially the number of aggregates disseminated at EU level. A table in Chapter 2.2 illustrates the extent to which confidentiality reduces data availability.

Timeliness: a second major result is that there has been a noticeable improvement in timeliness. Based on data actually transmitted, the average delay after the deadline [4] fell from more than 5 months for reference year 1996 to 1.5 months for reference year 2000. These results, which depend neither on the sector nor on the country, are due to the changes brought in several countries setting up new survey systems or carrying out major changes to existing systems during the transitional period (1995-1999).

[4] 18 months for the series under review, except in the insurance sector (10 months).

Evaluation of quality: Commission Regulation (EC) No 1618/1999 of 23 July 1999 concerning the criteria for the evaluation of quality of structural business statistics required Member States to provide, annually, within a period of 24 months from the end of the reference year, information relating to the accuracy of data. This regulation has been fully implemented as from reference year 1999. In the 1999 reports all Member States provided information for each of the points required except a few cases concerning the item "non-response". Although Luxembourg and Ireland are regarded as being exempt from the provisions of the Commission Regulation on the grounds of their size, they have voluntarily provided Eurostat with information on the organisation of their survey systems. Eurostat has made an analysis of the information provided on the coefficients of variation in order to compile an overall figure for the EU. Some results of this analysis are provided in Annex 4.

Assessment of burden: progress is still being made only slowly on the assessment of response burden as very few Member States regularly collect such information. Work to assess burden across the EU has underlined the difficulties of providing a relevant quantitative assessment for the Union; the most important difficulty being how an estimate of burden can be connected to information on the availability and quality of the statistical information compiled and disseminated. However, Part III of the Report proposes both quantitative and qualitative elements for this assessment. As a major result, the Member States are continuing their efforts to limit or reduce the statistical burden on companies. An overview of qualitative contributions to that goal is given in Chapter 3.2. The quantitative results of these efforts may be measured especially in the case of small and medium enterprises, whose relative statistical burden decreased between 1995 and 2000 and even after 2000 (see Chapter 3.3).

Users' needs and SBS developments: users' needs for structural business statistics have continued to grow and diversify. Chapter 2.1 gives an overview of the main categories of users (Community policies, business and business associations, research bodies). The first main concerns of these users have already been discussed (availability, freshness). Another feature of European statistics is that they must be comparable. Efforts have been made in that direction through regulatory measures (harmonisation of concepts and definitions). However, work remains to be done from the methodological point of view (using harmonised classifications rules, using the statistical units, pending issues about thresholds and interpretation of definitions). The second main concern of users is the relevance of the statistical offer. In the SBS area a rolling development programme has been set up through a permanent "statistical watch" ; the programme for the years 2003 to 2005 is presented in Chapter 4.2. In the following years the SBS will bring a strong contribution to the development of the statistics on services (see the "services strategy").

The general extension of the SBS to the Acceding Countries (and more generally to the Candidate Countries) should also be mentioned here. The current development of SBS in these countries bears comparison with most of the Member States. Their progress is described in Annex 8.

Conclusions and recommendations

General assessment of the implementation of the SBS-R Since the adoption of the SBS Regulation most of the Member States and Norway have made great progress in making high quality data available to users of European SBS data. Most of the Member States achieved this progress during the transition period. Many of those that did not, for whatever reason, complete the task during this period have continued their efforts in 1999 and 2000 and recorded progress bringing them closer to a full implementation.

Significant problems remain in two countries.

In Ireland thresholds need to be removed in industry and construction. Although there have been recent improvements, delays are not significantly better in 2000 than they were in 1996.

The poor availability of Greek data is the largest single problem in the implementation of the Regulation. What data is available is limited in activity coverage, not comparable with other countries because of a size threshold excluding small enterprises, and arrives late.

Turning attention to the remaining countries the following areas have been noted where final improvements are needed.

-- Belgium needs to make further progress on the timeliness of regional data.

-- Germany needs to make further progress on the timeliness of data for the distribution sector in general and for size-class data and regional data for services. The surveys in services are new and this may explain the delays currently experienced.

-- Spain needs to make further progress on the timeliness of data for the construction sector.

-- Sweden needs to produce regional construction data.

-- Norway needs to make further progress on the timeliness of data for the distribution sector.

Actions and recommendations [5] The Commission will continue to work with national statistical authorities to review the requirements under the SBS Regulation paying attention to changing user needs and the burden on the business community. In particular:

[5] The Community statistical programme 2003 to 2007 (Decision No 2367/2002/EC of the European Parliament and of the Council of 16 December 2002) foresees in its title XVI amongst others that work will progress in the following areas: improve the system for developing structural business statistics, based on political needs and with a capacity of quick reaction to changing factors such as environment, policies and users; focus on the quality assessment and improvement of the data produced. Some of these actions will have to be carried out through regulatory procedures (see also 4.3.1).

-- Eurostat will set up a reporting system that will be regularly updated. This will show the current state of implementation and allow both the main implementation problems and the details to be clearly identified in order that they can be followed-up more effectively. It will be discussed at Business Directors meetings and in the SBS Steering Group meetings.

-- In order to maintain the rhythm of progress in SBS area, the Commission will continue to work with National Statistical Offices to ensure a full implementation of the SBS Regulation where this has not yet been achieved, with particular attention to those Member States where major changes in data collection practices appear necessary and to Acceding countries.

-- Based on the regular reporting procedure proposed to follow-up implementation, Eurostat and the Member States will develop and implement a quality programme in which quality will be measured and quality problems will be addressed.

-- Eurostat will continue efforts to make data available more rapidly by improving data treatment procedures. It will set up procedures to ensure that all available data are disseminated, notably by means of a regular audit comparing the volume of data transmitted by Member States with the volume of data made available to users through Eurostat's reference data base (NewCronos).

-- the Commission will work with national statistical authorities to implement the services strategy presented to the SPC in September 2002;

-- the Commission will launch a second round of consultations on the possibility of adapting parts of the SBS Regulation that were not considered in the first round of adaptations completed in September 2002.

TABLE OF CONTENTS

PART I

Implementation of the SBS Regulation

1.1 The SBS Regulation and related legislation

1.2 Eurostat's implementation of the SBS Regulation

1.3 Implementation of the SBS Regulation in the Member States

1.4 Other aspects of implementation

PART II

Structural Business Statistics

2.1 Quality of SBS data: relevance and completeness

2.2 Quality of SBS data: availability

2.3 Quality of SBS data: timeliness

2.4 Quality of SBS data: accuracy

2.5 Quality of SBS data: comparability

2.6 Future work on quality

PART III

Costs and statistical burden

3.1 Impact of the adaptation process

3.2 Some ways to limit the statistical burden

3.3 A summary indicator of the evolution of the statistical burden

PART IV

Development of Structural Business Statistics

4.1 Review of the pilot studies and similar work on missing definitions

4.2 Integration of pilot studies in the rolling development programme

4.3 Continuing the progress towards better services statistics - a strategy for services statistics

ANNEXES

Annexes 1 to 10

PART I

1. Implementation of the SBS Regulation

1.1. The SBS Regulation and related legislation

1.1.1. Background to the SBS Regulation

1.1.1.1. Problems with structural business statistics at the end of the 1980s

Prior to the adoption of the SBS Regulation, harmonised European structural business statistics had only been available for a limited part of the business community, namely the traditional industrial sectors of energy and water supply and extraction, manufacturing and construction. The statistical information available for the industrial sectors was based on two Council Directives [6] adopted in 1964 and 1972. Despite the number of years during which the Directives were in force the production of European industrial structural statistics remained to a greater or lesser extent an annex to most national systems. These statistics became progressively less useful due to economic and technical developments in the intervening years and a combination of the inflexibility of the legal instruments and limited success in development outside of the legal framework. At the end of the 1980s many serious problems were evident in the extent to which the Directives were not being respected and more importantly in the lack of data available for the Commission to respond to users' data needs. In particular the following points were noted.

[6] Council Directive 64/475/EEC of 30 July 1964 concerning co-ordinated annual surveys of investment in industry (OJ L 131 of 13.8.1964, p. 2913) and Council Directive 72/221/EEC of 6 June 1972 concerning co-ordinated annual surveys of industrial activity (OJ L 133 of 10.6.1972, p. 57).

-- Data covering enterprises of all sizes was only provided every 5 years if it was provided at all.

-- Some industrial sectors, notably construction, were ignored by some Member States. Most Member States did not cover fully the service sectors of the economy and some did not cover it at all on an annual basis.

-- Changes in business practices, such as the increased incidence of part-time employment, the use of leasing and the role of intangible investment had weakened the usefulness of existing measures.

-- Many users complained that the delay in the availability of data was far too great.

-- Information was lost due to data being hidden at the national level to avoid the disclosure of confidential data, or through the passage from national classifications to the common NACE 70. This made it close to impossible to calculate data for the EU as a whole.

-- The statistics were produced for different statistical units with neither the enterprise nor the kind-of-activity unit being adopted as statistical units by all the national statistical authorities.

-- Most national statistical authorities did not collect or supply certain of the required variables.

Some of these difficulties were reduced through the implementation of Council Regulation No 3037 of 9 October [7] 1990 on the statistical classification of economic activities in the European Community (NACE Rev. 1) and with the development of other statistical tools such as the harmonisation of business registers [8], however major difficulties remained.

[7] OJ L 293 of 24.10.1990, p. 1

[8] Council Regulation (EEC) No 2186/93 of 22 July 1993 on Community co-ordination in drawing up business registers for statistical purposes (OJ L 196 of 5.8.1993, p. 1).

1.1.1.2. Adoption of the SBS Regulation

In 1995 the Commission finalised its proposal to the Council for a new legal basis for European structural business statistics. On 20 December 1996 the Council Regulation (EC, EURATOM) No 58/97 concerning structural business statistics was adopted. It was published in the Official Journal of the European Communities on 17 January 1997 and entered into force 20 days later.

1.1.1.3. Objective of the SBS Regulation

The objective of the SBS Regulation according to Article 1 is to establish a common framework for the collection, compilation, transmission and evaluation of Community statistics on the structure, activity, competitiveness and performance of businesses in the Community. Full implementation of the SBS Regulation would result in the national statistical authorities, who are responsible for data collection, transmitting to Eurostat data which is comparable between the Member States. The SBS Regulation lays down or anticipates the norms, standards and definitions necessary for producing comparable Community statistics, without detailing the actual collection methods to be used. As such the statistical authorities in each Member State may conduct the data collection exercises in the manner most appropriate to its own situation, for example to take account of national requirements for the presentation of company accounts.

Through its Committee procedure the SBS Regulation provides a degree of flexibility whereby measures adjusting to economic and technical developments can be taken by the Commission after consulting the Member States.

The framework referred to in the first Article of the SBS Regulation is made up of a number of broad provisions in the text that are relevant for most or all structural business statistics. These broad provisions are supplemented by more specific provisions in the four annexes. The first annex is a general one relating to the production of a number of standard indicators for all activities covered by the Regulation. The other three cover respectively industry, distributive trades and construction. This modular approach lends itself to relatively simple modifications of the SBS Regulation as and when decisions are taken to extend the data collection to cover in more detail any particular aspect of the business community.

1.1.2. Developments undertaken

1.1.2.1. Integration of the SBS Regulation into the statistical annex of the EEA treaty

The SBS Regulation was incorporated into annex XXI (statistical annex) of the EEA Agreement by Decision 13/1999 of the EEA Joint Committee at its 60th meeting on 29 January 1999 and entered into force the next day.

1.1.2.2. Council Regulation amending the SBS Regulation, 1998

On 16 February 1998 Council Regulation (EC, Euratom) No 410/98 amending Regulation (EC, Euratom) No 58/97 concerning structural business statistics was adopted adding a fifth annex to the SBS Regulation. This annex concerns a framework for structural business statistics for life and non-life insurance activities starting with the 1996 reference period.

1.1.2.3. Commission Regulations implementing the SBS Regulation

The SBS Regulation includes a procedure whereby the Commission, after consulting the Statistical Programme Committee, may determine implementing procedures.

The SBS Regulation lays down a number of specific areas where there are implementing measures to be determined. Between the adoption of the text in 1996 and the time of drafting this report this procedure has been used for the following implementation aspects:

-- definitions of the characteristics;

-- first reference year for the compilation of the preliminary results;

-- breakdown of results;

-- frequency of the compilation of the statistics;

-- appropriate technical format for the transmission of results;

-- transitional period and derogations from the provisions of the SBS Regulation;

-- criteria for the evaluation of quality.

Measures relating to all of these have been presented to the SPC and adopted as nine Commission Regulations during 1998 and 1999. [9]

[9] Commission Regulation (EC) No 2699/98 of 17 December 1998 concerning the derogations to be granted for structural business statistics (OJ L 344 of 18.12.1998, p. 1); Commission Regulation (EC) No 2700/98 of 17 December 1998 concerning the definitions of characteristics for structural business statistics (OJ L 344 of 18.12.1998, p. 49); Commission Regulation (EC) No 2701/98 of 17 December 1998 concerning the series of data to be produced for structural business statistics (OJ No L 344 of 18.12.1998, p. 81); Commission Regulation (EC) No 2702/98 of 17 December 1998 concerning the technical format for the transmission of structural business statistics (OJ L 344 of 18.12.1998, p. 102); Commission Regulation (EC) No 1618/99 of 23 July 1999 concerning the criteria for the evaluation of quality of structural business statistics (OJ L 192 of 24.7.1999, p. 11); Commission Regulation (EC) No 1225/99 of 27 May 1999 concerning the definitions of characteristics for insurance services statistics (OJ L 154 of 19.6.1999, p. 1); Commission Regulation (EC) No 1226/99 of 28 May 1999 concerning the derogations to be granted for insurance services statistics (OJ L 154 of 19.6.1999, p. 46); Commission Regulation (EC) No 1227/99 of 28 May 1999 concerning the technical format for the transmission of insurance services statistics (OJ L 154 of 19.6.1999, p. 75); Commission Regulation (EC) No 1228/99 of 28 May 1999 concerning the series of data to be produced for insurance services statistics (OJ L 154 of 19.6.1999, p. 91).

1.1.2.4. Adaptation process

The procedure for determining implementing measures can also be followed for measures to adjust the provisions of the SBS Regulation in the event of economic and technical developments. At the end of 2000 Eurostat prepared its first proposals to amend the SBS Regulation using the Comitology procedure. The aims of this work were to try to reduce or at least contain the statistical burden by removing less useful parts of the requirements, offering room for new investigations or developments of the SBS Regulation in the future. These were discussed with data users and the national statistical authorities and adopted by the Commission on 6 September 2002. More information on this point can be found in Chapter 3.1.

1.1.2.5. Council and European Parliament Regulation amending the SBS Regulation, 2002

In 2001 the Commission adopted a proposal for a second amendment to the SBS Regulation. This amendment essentially proposed to add two new annexes concerning credit institutions and pension funds, to add two variables related to expenditure on environmental protection and to extend indefinitely the time period for work on the pilot studies. On 20 June 2002 a common position was adopted by the Council and in October 2002 the European Parliament accepted this position. Regulation (EC) No. 2056/2002 of the European Parliament and of the Council of 5 November 2002 amending Council Regulation (EC, Euratom) No 58/97 concerning structural business statistics [10] was published on 21 November 2002 and entered into force 20 days later.

[10] OJ L 317 of 21.11.2002, p. 1.

1.2. Eurostat's implementation of the SBS Regulation

From a formal perspective the Commission's work on implementation has been concerned with the preparation of Commission implementing and modifying Regulations. In practice many other actions are necessary to ensure that data transmitted to Eurostat makes its way to users.

On reception of data Eurostat runs a number of checks on it to check for coherency and to identify if the data delivered are complete and on time with respect to the requirements of the SBS Regulation, taking account of any derogations. Problems arising from the coherency checks are discussed with the countries concerned to try to solve them. Serious problems of non-compliance with the requirements of the SBS Regulation are discussed bilaterally with the countries concerned.

Eurostat's added value to the data transmitted by national statistical authorities is multiple. In the last few years developments have been concentrated in two areas, namely estimating totals for the EU and accelerating data treatment. In simple circumstances, when data are available for all Member States, EU totals are calculated. Estimates are frequently needed and Eurostat continues to develop and extend the range of estimates made for SBS data. Starting in 2002 Eurostat has extended its procedures for the estimation of EU totals from manufacturing to include mining and quarrying, electricity, gas and water supply, construction and all of the non-financial service sectors covered by the SBS Regulation. These estimation procedures have also been extended to the series of data broken down by size class whereas previously they only covered the national series.

Eurostat continues to work with various partners to try to improve the treatment of confidentiality. Notably, during 2002 new software has been introduced within Eurostat to try to automate the treatment of confidential data with the aim of speeding up data treatment and reducing the risk of errors.

Resources within Eurostat are limited to treat national data sets and to add value through aggregations, estimations, the calculation of derived indicators and dissemination. Eurostat has in the past sub-contracted some of these processes but over the last few years has internalised all of the data processing of the data provided under the provisions of the SBS Regulation except that for financial intermediation. Furthermore it carries out all of the added value services itself except for the preparation of some of the dissemination products.

1.3. Implementation of the SBS Regulation in the Member States

1.3.1. Current methods of data compilation

The SBS Regulation provided for a transition period. In practice this has been implemented as a period of four years covering the reference periods 1995 to 1998 inclusive. Numerous changes were made in national practices during the period immediately after the SBS Regulation came into force. In principle, the situation now is more stable as the transition period is over and all necessary measures should have been taken. This point of the present report provides an overview of the situation for the latest reference year available, generally 2000.

The survey strategies of the Member States can be classified in a number of ways. One group of Member States relies almost entirely on statistical surveys (Belgium, Germany, Greece [11], Spain, Ireland, the Netherlands, Austria, Portugal and the United Kingdom), another mainly uses administrative data as a substitute for statistical surveys for a major part of the population (Denmark, Finland and Sweden) and a third group confronts statistical survey and administrative data (France, Italy, Luxembourg and Norway) to produce integrated results.

[11] From 1999 it is intended to use administrative data for manufacturing enterprises with less than 10 persons employed as a replacement of the sample started in 1997.

Practically all Member States use sampling for surveys below a certain size threshold and some, relying entirely on administrative data, do not survey smaller enterprises at all (Denmark, France [12], Luxembourg, Finland and Sweden). Belgium, Germany, Spain, France [13], Ireland, Italy, Austria, Portugal and the United Kingdom use simplified questionnaires for smaller enterprises.

[12] In some sectors.

[13] In some sectors.

In all Member States except one the co-ordination of surveys in different sectors is achieved at least through the use of a common business register. The main exception to this rule is NACE Section J (financial intermediation) which is treated as a special case by Member States - see following paragraph.

Apart from this one NACE Section, Member States generally use a harmonised system to compile results across all of the other activities. However, in some countries there is greater diversity in the methods used between sectors and these survey systems can generally be described as co-ordinated rather than harmonised. For example, in France and Spain Government Ministries carry out some of the surveys with varying degrees of co-ordination provided by the statistical office. There are different survey strategies for different sectors in Denmark (from 2001 only for Section E), Germany, Spain, Ireland and the Netherlands. The other Member States tend to have a more harmonised system with sector-specific matters addressed in questionnaires tailored to the activities concerned rather than independent surveys. A move towards this harmonised approach has been observed since the adoption of the SBS Regulation.

In insurance, the tasks for collection and transmission of data to Eurostat are often shared between the national statistical authority and the regulatory authorities.

-- In Belgium, Denmark, Germany [14], Spain, France, Italy, Austria and Finland the relevant regulatory authorities are responsible for the collection and transmission of data.

[14] For some variables.

-- In Ireland it is the national statistical authority that is entirely responsible for this sector.

-- In Luxembourg, the Netherlands, Sweden, the United Kingdom and Norway the data collection is done by the regulatory authorities but the data are transmitted by the national statistical authority.

-- In Portugal some data collection is done by the regulatory authorities but the data are transmitted by the national statistical authority, which also collects further data.

Whilst most Member States use the enterprise as the main statistical unit for their statistical surveys, there is a great variety in methods used to compile KAU [15] and regional data.

[15] Kind-of-activity unit. A KAU groups all the parts of an enterprise contributing to the performance of an activity at class level (4-digits) of NACE Rev. 1. See glossary for more details.

Several Member States collect KAU (or local KAU) data directly by having a special questionnaire or insert to their main questionnaire; this is the case in Denmark, Germany (for NACE Section E), Luxembourg, the Netherlands, Austria, Finland, Sweden and Norway.

Some Member States collect data for local units and consider these as a proxy for KAU data; this is the case in Spain and Italy.

Some Member States collect enterprise data broken down by activity for one or more key variables and then use this to estimate KAU data for all of the required variables; this is the approach in Portugal and the United Kingdom. In Germany KAU data (for NACE Sections C and D) are derived by combining the enterprise results with local KAU data from the short-term business statistics.

Several Member States do not yet compile KAU data (Belgium, Greece, France and Ireland).

Several Member States collect local unit (or local KAU) data directly by having a special questionnaire or insert to their main questionnaire. This is the case in Belgium, Denmark [16], Greece, Spain (for industrial data), Ireland [17], Luxembourg, Austria, Finland [18], Sweden [19] and Norway.

[16] The local KAU is used as the statistical unit not the local unit.

[17] Used for industry; no regional data available for construction, distribution or services.

[18] Used for industry and construction; register data is used to estimate results for distribution and services.

[19] Used for industry; register data is used to estimate results for distribution and services; regional data is not compiled for construction.

Some Member States collect enterprise data broken down by region for one or more key variables and then use this to estimate regional data for all of the required variables; this is the approach in Spain (for distribution and services), Italy and the Netherlands.

Germany estimates regional industrial and construction data using short-term business statistics (except for investment in industry which is collected in an annual survey). For NACE Sections G and H administrative data is used.

Portugal compiles regional data using the legal unit/enterprise as the statistical unit.

The United Kingdom compiles regional statistics using administrative data and modelling to provide a regional breakdown of the enterprise results.

The methods used for compiling preliminary results also vary between Member States.

-- Spain, Germany [20], France, Ireland [21], Portugal, the United Kingdom and Norway use early returns from the main survey; Germany also uses the results of infra-annual (monthly or quarterly) surveys.

[20] Used for industry and construction; preliminary results for some service sectors are also estimated.

[21] Used for industry; no preliminary results available for construction, distribution or services.

-- Luxembourg uses administrative data, notably the business register.

-- Belgium, Denmark, Italy, Finland and Sweden use a combination of early results from the surveys and administrative data.

-- The Netherlands estimates the results based on infra-annual (monthly or quarterly) surveys.

-- Austria uses results from infra-annual surveys for industry, construction and distribution sectors, supplemented with business register data for industry and construction; for services national accounts data are used.

-- Greece does not yet compile preliminary results.

1.3.2. What implementation efforts have been made and what still remains to be achieved

1.3.2.1. Overview of efforts made since the 1997 reference year

Several Member States had made major changes to their survey system between the adoption of the SBS Regulation and the time of the previous (first) report to the Council and European Parliament on the implementation of the SBS Regulation. With the exception of timeliness (where several Member States still had progress to make) by the 1997 reference period the activity and size coverage of SBS data was relatively complete in Belgium, France, Italy, Luxembourg, Austria, Portugal, Finland and Sweden. At least for the main annual enterprise series of data there were few if any major changes still to undertake for a high level of implementation. Many of the Member States have made efforts since then to compile results for specific activities or variables that were not available, and to speed up the timeliness of results. A number of Member States have also made major changes to their survey systems since the 1997 reference period, notably by extending greatly the activity or size coverage of their statistics or by increasing the frequency of surveys. The following points in particular can be noted.

-- Belgium has improved the data compilation procedure to provide regional data without a cut-off threshold. Results for a number of previously missing variables are now compiled.

-- Denmark has extended the coverage of its accounts statistics from manufacturing, construction and retail trades to encompass all activities required by the SBS Regulation.

-- Germany has started compiling results for the industrial and construction sectors that represent the entire population without a size threshold, initially on the basis of estimations for smaller enterprises, and from 2001 using a sample survey for enterprises with less than 20 persons employed. The coverage of the survey in distribution has been expanded and is now complete. The frequency of the survey in NACE Section H has increased to be annual. Results have been compiled since 1999 for NACE Sections I and K with a new sample survey from the 2000 reference year. Results for a number of previously missing variables are now compiled.

-- Greece has removed the cut-off threshold of 10 persons employed for Sections C to E by introducing an exhaustive survey below this for Sections C and E and a sample survey for Section D. Since 1999 the sample survey for Section D has been replaced by the use of administrative data. Nevertheless the cut-off threshold has continued to apply to data compiled under the provisions of the SBS Regulation for Sections C and D up to and including the 1999 reference year (latest year available).

-- Spain has introduced a survey to cover all service activities, initially covering half of the service activities each year - from 2000 a full survey will take place annually. Construction statistics have been provided since 1999. The industrial survey has been expanded to compile results for some variables that were previously missing. The threshold of one employee for industrial sectors has been removed since 1999.

-- Italy already had a relatively complete size and activity coverage; however since 1998 administrative sources have been used for larger enterprises. For enterprises with between 20 and 99 employees a census was carried out before 1998; since 1998 a sample has been used for this stratum. Administrative data are also now being used to compile preliminary results.

-- Luxembourg already had a relatively complete size and activity coverage; however administrative sources are now used more extensively for smaller enterprises and in consequence the lower threshold for inclusion in the survey has been raised to 50 employees and/or turnover exceeding EUR 7 million.

-- The Netherlands has extended the survey coverage to include Section C and Division 73. The size threshold of 20 persons employed has been removed for Section E and also for the investment survey in Sections C to F. A redesign of most surveys was implemented in 2000.

-- Portugal has started producing KAU, regional and preliminary series of data. A number of previously missing variables are now compiled. Size coverage has been extended to be complete.

-- Finland already had a relatively complete size and activity coverage; however administrative sources are now used more extensively for smaller enterprises and in consequence sampling has been introduced in the survey for enterprises with between 5 and 19 persons employed in construction and between 5 and 49 persons employed in distribution whereas previously all enterprises in these sectors with 10 or more persons employed had been surveyed.

-- Swedish regional data for NACE Sections E (electricity, gas and water supply) and G to K (distribution and services) have been provided since 1999. Preliminary results have been compiled in accordance with the SBS Regulation requirements since 1998.

-- The United Kingdom introduced a harmonised survey system (the annual business inquiry - ABI) covering all activities in 1998, replacing the previous system of independent sectoral surveys and an independent employment survey. This has lead to the inclusion of several new variables in 1998 and 1999 and to the coverage of NACE Class 64.11 since 1999. Preliminary results are now compiled. Administrative data are now being used to compile regional data.

-- Norway has introduced a new system of service statistics. Although not a new data collection, SBS compatible data are now compiled for NACE Division 11 and Section E from existing statistics. Generally, more administrative data are being used instead of surveys. Results are compiled (from statistical surveys) for a number of new variables, notably financial leasing, environmental protection expenditure and expenditure on software.

As can be seen from above, for example in the cases of Italy, Luxembourg and Finland, Member States continue to refine their survey systems, even when there was already a relatively complete coverage in activity and size terms, notably to reduce the burden on smaller enterprises. Austria has announced plans to make similar changes from 2002 to exclude smaller enterprises from the statistical surveys and to estimate results based essentially on administrative data. Portugal has announced plans for a major review between 2002 and 2005 which, among other objectives, will aim to simplify questionnaires, extend the use of administrative and other data, and establish and improve electronic data interchange. Sweden has announced plans to make wider use of administrative data for large enterprises integrating the statistical survey results and administrative data for these enterprises.

1.3.2.2. Remaining problems and timetables for implementation

As of the 2000 reference year a number of problems remain with respect to implementation in the Member States. In some cases plans have been developed or even implemented to resolve these problems.

-- Belgium does not yet provide KAU data nor does it compile results concerning purchases of energy. No plans currently exist to solve these problems and efforts are being directed to maintaining the current survey system.

-- In Denmark there are plans to compile the variables related to R&D (intra-mural expenditure and personnel) and also the variable related to the number of hours worked by employees.

-- In Germany, successful implementation of the planned sample survey of small industrial and construction enterprises and the survey in NACE Sections I and K should complete the coverage of the survey system. There remain some problems of interpretation concerning NACE Class 74.15 (holding companies) that are expected to be solved with the implementation of the new activity classification (WZ 2003).

-- In Greece the results for industry exclude enterprises with less than 10 persons employed although data are collected for these units. No KAU data or preliminary results are compiled. Preliminary results are not expected before the 2003 reference period at the earliest.

-- In France the preliminary results do not cover enterprises in NACE Section D with less than 20 employees.

-- In Ireland the results for industry exclude enterprises with less than three persons employed and the results for construction exclude enterprises with less than 20 persons employed. Preliminary data are not yet compiled for construction, distribution or services. It is hoped to produce preliminary data for most of these activities for the 2002 reference year. No regional data are available yet for the construction sector but it is intended to provide these for the 2000 reference year. No KAU data are compiled. Information on personnel costs is not available for service sectors but will become available from the 2001 reference year. Many variables are missing for insurance.

-- Luxembourg has not provided regional [22] series and will try to provide this data in the future. Results are not compiled for a number of variables, notably concerning business demography, the number of home-workers and sub-contracting. The size class breakdowns for insurance are not sufficiently detailed.

[22] Luxembourg is a single region at the level of detail required by the SBS Regulation.

-- The Netherlands still uses size classes expressed in terms of employees and this is expected to change to the number of persons employed for the 2002 reference year.

-- Finland has introduced a pilot survey that should be operational by the 2002 reference year for the multi-yearly variables in the distribution sector.

-- Sweden does not yet compile regional construction statistics nor does it compile results for the R&D variables or the number of part-time employees.

-- The United Kingdom will provide data on hours worked from the 2000 reference year. Some of the data for the insurance sector are not yet available.

-- Norway has compiled preliminary results for construction, distribution and services from the 2001 reference year and for the industrial sectors from the 2002 reference year. Results for the R& D variables will be compiled for the 2001 reference year from a separate R&D survey.

1.4. Other aspects of implementation

1.4.1. Implementation of the data transmission formats

Nearly all countries provide data in accordance with the data transmission format. Two problems can however be noted with the implementation in practice.

The SBS Regulation in its annexes indicates the lowest level at which data should be transmitted to Eurostat, often the 4-digit level but sometimes higher. Neither the SBS Regulation nor its implementing Regulations require data to be sent for higher levels of the NACE classification (such as Sections, Sub-sections etc.), but they do not prohibit it. Eurostat has encouraged Member States to provide all higher levels in order to be able to identify and protect properly confidential data, and most countries do this.

The second problem is the non-transmission by some Member States of data for activities or size classes in which there are no units active. The absence of this data is interpreted as the data being missing, when in fact it should be indicated as 0 (zero). The main consequence of this is that users cannot interpret the data as they do not know which values are zero and which are simply missing. Secondly, evaluations of data availability such as those done elsewhere in this report underestimate data availability as they count these "not delivered" zero values in exactly the same way as missing values.

1.4.2. Implementation of the 1% rule

In several places in the SBS Regulation some Member States may be excluded from particular provisions on the grounds of their size. These exclusions are normally determined by the proportion of the EU total accounted for by a Member State according to a particular variable in a certain sector. Clearly before this can be determined an EU total is required. The main cases of such exclusions according to these rules concern Annexes 3 and 4 of the SBS Regulation, although there are others. If a Member State represents less than 1% of the EU total in terms of both turnover and the number of persons employed for any of the Divisions in Sections F or G, that Member State does not need to provide data for these Divisions for any of the variables not included in Annex 1. Unfortunately nearly 6 years after the adoption of the SBS Regulation no EU totals are available for any of the four Divisions concerned. It has been assumed until now that both Ireland and Luxembourg were below this threshold in both cases. Although data are not yet available to assess precisely the situation, it seems likely that most of the Accession countries will also fall under the 1% rule for some or all of the Divisions in Sections F and G. For this reason it is essential to clarify the interpretation of this rule and its practical implementation for the future.

1.4.3. Definitions

The definitions of births and deaths of enterprises expressly link these variables to the business register. In practice most of the other variables in the SBS Regulation are provided from administrative declarations or surveys and are adjusted to take account of changes to the population that have been discovered during the course of the data collection. The definitions do not precisely say at what point in time the count of enterprises should take place. For example this could be done on 1 January or 31 December of the reference period, or it could be specified that enterprises are included if they have been active for at least a part of the reference year. There are a number of related, complicated issues affecting the definition of such demographic variables and Eurostat is working with the Member States to clarify these issues.

The Commission Regulation on definitions does not include definitions for the following variables: gross investment in concessions, patents, licences, trade marks, and similar rights (15 42 0), investment in purchased software (15 44 1), investment in software produced by the unit (15 44 2), breakdown of turnover by product (18 21 0) and income from sub-contracting (23 12 0).

A number of Member States have expressed concerns over the definitions of variables in practice. The following problem areas have been mentioned: full-time equivalents for employment variables, financial leasing, number of apprentices, payments for agency workers, environmental protection expenditure variables, intra-mural R&D expenditure and employment.

PART II

2. Structural Business Statistics

2.1. Quality of SBS data: relevance and completeness

2.1.1. Users and their needs

2.1.1.1. Community policies

The central objective of European business statistics is to supply the necessary information on the structure, activity, competitiveness and performance of the European business community in order to permit accurate, up-to-date sectoral analyses. The design and effectiveness of policy instruments employed will depend on detailed sectoral monitoring of structural variables with a view, in particular, to assessing the various aspects of the competitiveness and economic viability of Community businesses.

In the Lisbon European Council meeting in March 2000 the European Union set itself the goal "to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion" [23].

[23] Lisbon European Council, Presidency conclusions - (A strategic goal for the next decade).

Meeting in Stockholm in March 2001, the European Council restated the importance of exploiting the potential of the internal market as "Well-functioning markets are vital for increasing consumer benefits and creating an entrepreneurial environment. The success of earlier reforms, with falling costs and better choice and quality of products delivered, provides a strong incentive for further progress. The creation of an effectively functioning internal market in services is one of Europe's highest priorities."

Accordingly, "Member States and the Commission are requested to improve the quality, timeliness and availability of statistical information necessary for benchmarking in commonly agreed areas of crucial importance for enterprise policy"

Furthermore at the Brussels 2003 Spring European Council, the Commission expressed its intention to report in time for the 2004 Spring European Council on how the use of structural indicators and other analytical tools for assessing progress on Lisbon strategy could be strengthened.

These needs for structural business statistics from policy makers are supplemented by needs from within the statistical system, in particular from national accounts and from short-term statistics.

As well as the basic enterprise and industry policies, structural business statistics are used in policy development and monitoring in a number of other more specific areas, for example environment.

2.1.1.2. Use by business and business associations

Businesses require information on the competitive situation of their own sector and information on the sectors of their suppliers and clients. Businesses may access European structural business statistics directly from Commission products (databases, off-line electronic products and paper products) or via intermediaries. In the latter case European trade associations play an influential role in the transmission of statistical information from statistical institutions to their members. Many have a statistical capability through which they compile data from many sources, including structural business statistics, and provide their members with information specific to their activity. The main reasons for European trade associations to use Eurostat data are that they are relatively standardised and available for a large number of countries.

2.1.1.3. Dissemination to respondents

A number of Member States return aggregated results to enterprises that have participated in surveys on a systematic basis or on request. In Germany respondents receive tabular results in industry and construction. In Denmark and Greece information is returned to respondents only on request. In Spain, respondents to the main industrial survey receive personalised information comparing themselves to similar units while respondents to the service sector survey receive aggregated data concerning their activity. Finland provides respondents with personalised information comparing them to similar units. In Sweden some key indicators are provided to respondents. France is progressively implementing a policy of systematically returning information, either personalised or statistical, to every enterprise responding to every statistical survey; this started many years ago in the manufacturing industry. Portugal is planning to implement a policy of systematically returning statistical information to respondents.

2.1.1.4. Maintaining relevance for users

Eurostat continues to assess the extent to which the SBS data made available to users meet their needs. The adoption of Commission Regulation No 1614/02 in September 2002 is an example of the consequences of such an assessment. As noted earlier, the preparation of this Commission Regulation involved discussions with both users and suppliers of data to find ways of fine-tuning the requirements of the Regulation to better meet the needs of users.

Another example of an attempt to modify the SBS Regulation to maintain the relevance of SBS data is the Commission's proposal for an amendment to strengthen the data compilation relating to environmental protection expenditure.

Furthermore a three-year rolling programme has been established which aims to develop new areas of structural business statistics. This programme indicates the projects that are planned for the three coming years, showing the nature of the work to be done on each of them which normally takes the form of: preparatory work; methodological developments; data collection (testing of methodology); evaluation. The evaluation may lead to the discontinuation of work, a renewed data collection exercise or the preparation and subsequent implementation of a legal framework. Each year this rolling programme is reviewed to take account of the views of users of Eurostat data (notably from within the Commission) as well as Member States' own development plans. Base on this review a decision is taken whether the plans need to be amended and new projects added or existing projects stopped. It is hoped that this approach will lead to greater transparency and stability in development work allowing robust methods to be implemented in Member States and for all countries to learn from each other's practices in developing areas.

One part of the current three year rolling programme (2002 to 2004) is to set up ad hoc surveys. It is assumed that a quickly-changing economy requires the European Statistical System to be able to respond in an equally fast and flexible way to emerging user needs. The proposal to develop ad-hoc surveys has been approved in various meetings with national statistical authorities. It is hoped that these ad hoc surveys could be an opportunity to deal in a harmonised way with topics that could be addressed in several Member States. It is expected that these ad hoc surveys will be a good instrument to throw light on a phenomenon about which very little is known. Such surveys will not be proposed for the collection of information that is required on a regular basis. Following consultation with users as well as national statistical authorities, the topic of inter-enterprise relations was chosen for the first survey. A project description, draft questionnaire and definitions have been prepared.

Eurostat is investigating the possibility of introducing a legal framework, which may be necessary for ad hoc surveys to be carried out by all Member States.

A longer term assessment of users needs has been made as part of the development of the "Strategy for services statistics" that has recently been discussed by Eurostat and the national statistical authorities. This strategy outlines the next steps in the development of services SBS data to build on the major step forward taken by the SBS Regulation itself - see Chapter 4.3.

2.1.2. Dissemination policy

Eurostat disseminates SBS data and its related methodology through a number of products. The main ones are summarised in the table 1 below.

Table 1: main features of the SBS dissemination policy

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In addition to these publications Eurostat has released a number of one-off publications of results of particular surveys or analyses based principally on SBS data. A list of the main ones published between January 1999 and the end of April 2002 is included in annex 1.

A rationalisation of the dissemination policy has been undertaken since 2001 to seek a more balanced programme. In particular this has resulted in fewer special publications focusing on the distribution and financial intermediation sectors and greater emphasis on services sectors within the flagship publication European Business, facts and figures.

An analysis of users' perceptions of SBS data publications was conducted in 2002. This produced a number of fairly general conclusions of the strengths and weaknesses of current dissemination practices. It highlighted the importance of regular, repeat publications and indicated that the inter-relation/complementary nature of the current range of publications was not visible to many users. The report noted the important role that Eurostat's publications play in disseminating harmonised statistics for a range of countries rather than simply collecting together unharmonised national data. Amongst specialist users the report noted an interest in more information on methodological practices, quantitative measures of the quality of the data as well as more estimates for missing or late data.

2.1.3. On-line databases

NewCronos is Eurostat's reference database. SBS data are made available by Eurostat in Theme 4 (Industry, Trade and Services) of this database, within the SBS domain. This domain contains all of the data sent by Member States (and other EEA countries) under the provisions of the SBS regulation, as well as similar data from Candidate and other countries. It also contains data from some of the development projects related to SBS, for example on business demography and foreign affiliates trade statistics. An analysis has been made of the number of times the database was accessed for the main data tables during a seven month period of 2002 (May to November). These show (table 2) that the main enterprise data series (national data for enterprises of all sizes) are the most heavily frequented, both for data covering all business sectors and for the specialised tables for insurance. The size class data sets are also very heavily frequented, particularly those covering the industrial sectors.

Table 2: Elements for an assessment of the dissemination policy in SBS

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2.2. Quality of SBS data: availability

Since the 1999 reference period there have no longer been any derogations for Member States concerning the provisions of the SBS Regulation and its annexes 1 to 5. This chapter looks at how data availability improved up to this date and identifies areas where it is not yet complete.

The tables below give an overview of data availability for the annual enterprise series. This assessment is based on the situation in reference years 1996 and 2000 (when 2000 reference year data are not available the percentage for the 1999 reference year has been shown between parentheses). The analysis shows the proportion (in percentage terms) of the data that is available, compared to the compulsory requirements of the SBS Regulation. This has been evaluated by taking account of all compulsory variables [24] and the finest level of activity breakdown required by the Regulation. Where exemptions are permitted on the grounds of size, these have been taken into account in the calculation of the proportions.

[24] For insurance only list A variables have been considered, despite 2000 being the first year of compulsory transmission of List B variables.

The results of the analysis are summarised for each NACE Section (more detail for financial intermediation) in order to provide some information on the sectoral nature of any problems of data availability. The value shown in brackets after the name of the NACE Section is the theoretical maximum number of data points for any reference year, based on a combination of the number of variables required and the number of activities in the NACE Section. The first figure is the standard number used for most of the Member States and for Norway and the second figure is the number for smaller countries benefiting from exemptions: Ireland and Luxembourg have generally sent data on the basis that they benefit from these exemptions and hence in all cases the proportions for these countries are based on this second value.

The analysis of data availability was done based on the contents of Eurostat's reference database "NewCronos" on 16 January 2003. It should be noted that there is a delay between the delivery of data to Eurostat and its inclusion in the NewCronos database due to validation procedures and the treatment of confidentiality. Data that had been delivered by the above mentioned dates but not treated and hence not available on NewCronos are indicated with an asterisk *. Furthermore, if a Member State provides data in several stages (for example data may be delayed for certain sectors or for certain variables from special surveys), it is possible that the proportion of data for 2000 may still increase in the near future.

The table 3 shows the proportion (as a percentage) of available data, regardless of whether it is confidential or not.

Table 3 Availability table: general assessment; reference years 1996 and 2000.

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Note: Greek annual enterprise data for 1999 for Sections C to E has been provided. Because of the threshold (of 10 persons employed) used in this country these data are not disseminated by Eurostat alongside the SBS compatible data from other countries, but in a separate, limited dataset. Estimates by the Greek statistical office of the proportion of 1999 data available are 91% for Section C, 88% for Section D and 41% for Section E.

Note: The proportion of available data for Finland for insurance for 2000 would be 100% except that some records with a "0" value have been wrongly coded as not available.

This table 4 indicates, for the latest year available (either 1999 or 2000), the proportion (as a percentage) of the required data that is available and the proportion of the required data that is not confidential - this illustrates the extent to which confidentiality reduces data availability.

Table 4: Availability table: the confidentiality reduces data availability

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Very broadly it can be concluded that data availability is relatively high in: distribution; hotels and restaurants; transport, storage and communications; real estate, renting and other business services. Availability is weakest in: electricity, gas and water; construction; insurance.

All data (all required variables for all required activities) for the 2000 reference year were available for 11 of the 16 countries (Member States and Norway) for the following sectors: hotels and restaurants; transport, storage and communications; real estate, renting and other business services. For all other sectors the number of countries for which all data were available was much less.

A comparison of the data availability in 1996 and in 2000 shows that there has been an improvement in all sectors. The largest improvements have been in: construction; distribution; hotels and restaurants; real estate, renting and other business services. The improvement is a result of two factors. First, for several countries, data are available for more sectors in 2000 than in 1996; this is notably the case in Denmark, Germany, Spain, Sweden and Norway. Secondly the proportion of data available is higher in 2000 than in 1996 as more activities are available or more variables; this is notably the case in Austria, Germany and Spain.

Information on the availability of size class data and regional data is shown in annex 2.

2.3. Quality of SBS data: timeliness

The table 5 below lists the transmission delays for the main enterprise series. Delays are expressed in months beyond the maximum time-lag permitted by the SBS Regulation and the implementing Commission Regulations. For most sectors the maximum delay for the transmission of data is fixed at 18 months after the end of the reference period. For insurance it is 12 months after the end of the reference period. Naturally these maximum time-lags are constant over the period. Where 2000 data have not yet been received, a dash "-" is shown.

If revised data have been provided the mid-point between the first and last transmissions of the data was used. In one exceptional case when a country sent a first set of data much before the deadline and a revised version much later the transmission delay has been indicated as 0, neither early nor late.

The timeliness was analysed on 15 January 2003.

Table 5: Timeliness table for SBS definitive data, reference years 1996 and 2000.

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Commission Regulation (EC) No 2702/98 specified a standard technical format for the transmission of structural business statistics which has been adhered to by all Member States by the 2000 reference year, except for the United Kingdom which has since implemented it. Non-implementation of the standardised transmission format leads to increased delays in making final data available to users. Several countries have made revisions to their data, notably Denmark (1999), Spain, Luxembourg and Norway, and this also has a negative impact on the speed with which final data can be made available to users, although clearly it is better to have the revised data than to knowingly publish errors.

Considering the situation in 2000 for annexes 1 to 4, several groups of countries can be distinguished as regards timeliness:

-- a perfect level of compliance in terms of timeliness can be seen for four countries, Austria, Portugal, Finland and Sweden - this was already the case in 1999 for all of these countries.

-- five countries, Denmark, Italy, Luxembourg, the Netherlands and the United Kingdom have short delays (one month or less) for one or more series;

-- three countries, Belgium, France and Norway have longer delays (two to four months) for one or more series; in the case of France this was due solely to technical, computing problems that have been resolved;

-- two countries, Germany and Spain, would be in or close to the category of perfect compliance with the timeliness criteria if it were not for the data for the distribution (Germany) or construction (Spain) sector; data for the construction sector are produced independently of the national statistical authority in Spain.

The remaining two countries have particular situations. In Ireland there is a long delay in the transmission of data for each of the sectors. Greece has simply provided no data for several sectors of the economy for the 2000 reference year and the data for industry were several months late, though notably faster than the 1999 reference year data.

This overview cannot take account of all of the specific situations in each country and too much attention should not be paid to small differences in delays between countries. The gaps between the first and second, and second and third groupings of countries are quite small.

As well as looking at the current situation, some conclusions on progress can also be made.

Already by 1996 very good or perfect compliance with the timeliness requirements had been reached in Austria and Denmark and this situation has been maintained through to the present. In the Netherlands, Portugal, Finland and Sweden major progress was made during the transition period to reduce delays to a very good or perfect compliance with the requirements. The same is true in Spain, with the exception of the construction sector mentioned above.

In Belgium, France and the United Kingdom a similar effort during the transition period was also recorded leading to full respect of the timeliness requirements by the end of the period. However in these three countries the timeliness situation in 2000 has worsened compared to 1999 although it remains generally much better than it was in 1996 and this may be a temporary problem.

Italy and Luxembourg both showed progress in reducing delays during the transition period although their delays were still quite substantial in 1999. This progress has nevertheless been maintained and reinforced since the end of the transition period.

Germany recorded a worsening of the timeliness of their data between 1996 and the end of the transition period, but has improved since. Except for the distribution sector, delays were shorter in 2000 than they were in 1996. In the sectors of industry and construction full compliance with the timeliness requirements was reached.

Greece and Ireland also recorded a worsening of the timeliness of their data between 1996 and the end of the transition period, but both have recorded progress since then. In the case of Ireland this recent progress has brought them back to the position in 1996. In Greece delays were shorter in 2000 than they were in 1996.

When looking at the progress over time some care has to be taken. For example developments in other aspects of quality, such as the removal of a threshold to improve comparability or the extension of the activity coverage to improve availability (both of which have been done in Germany during the transition period), may have led to a worsening of the situation with respect to timeliness. It is to be hoped that in these cases progress will continue to be made to improve timeliness again, as appears to be the case in Germany.

Most of the Member States deliver data for annex 5 (Insurance) before the deadline or with a small delay. Only Denmark, Ireland and the United Kingdom had major delays in the provision of 2000 reference year data and Belgium and Greece did not provide any data for this reference year.

Availability of preliminary results was rather weak during the transition period. By the 2000 reference year (data due by end of October 2001) all Member States except for Greece and Ireland were providing the data and the longest delay beyond the deadline for any country was one month. Ireland and Norway have planned to start to provide preliminary results for at least some sectors from the 2001 reference year and the remainder are planned for the 2002 reference year. The table 6 below lists the transmission delays for the 2001 preliminary results. Delays are expressed in months beyond the maximum delay permitted by the SBS Regulation and implementing Commission Regulations. The maximum delay for the transmission of data is fixed at 10 months after the end of the reference period.

Where 2001 data have not yet been received, a dash "-" is shown. If a forecast delivery date is available, the forecast delay is indicated with an asterisk "*".

The timeliness was analysed on the 15th of January 2003.

Table 6: Timeliness table for SBS preliminary data, reference year 2001.

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Information on the timeliness of size class data and regional data is shown in annex 3.

2.4. Quality of SBS data: accuracy

2.4.1. Implementation of the quality Regulation

Commission Regulation (EC) No 1618/1999 of 23 July 1999 concerning the criteria for the evaluation of quality of structural business statistics required Member States to provide, annually (starting from 1997 inclusive), within 24 months from the end of the reference year, information on the coefficient of variation, non-response rate, survey strategy and method of determining the principal activity.

Note that an exemption from these requirements was provided for some Member States. The information need not be reported by a Member State if the value added at factor cost in that Member State normally represents less than 1% of the European Community total. This threshold is applied for each NACE Rev. 1 activity for which a quality indicator or a report is required. Luxembourg and Ireland are regarded as being exempt from the provisions of the Commission Regulation on the grounds of their size. They have, on a voluntary basis, provided Eurostat with information on the organisation of their survey systems.

By 1999 all Member States had provided the report. In the 1999 reports all Member States provided information for each of the points required except in some cases concerning item non-response. Eurostat has made an analysis of the information provided on the coefficients of variation in order to compile an overall figure for the EU. Some results of this analysis are given in annex 4.

At the time of writing the 2000 quality report was not yet due but had been provided by several Member States.

Several Member States use quality measures not just as measures for users but also to refine their data production processes. In particular these are used to review sampling methods and to concentrate efforts to improve response rates in the areas most needing attention.

2.5. Quality of SBS data: comparability

In general, statistics have their greatest usefulness when they enable reliable comparisons of values across space and time. In the case of structural business statistics this stresses the comparison of the same statistics between countries in order to make international comparisons and to evaluate the meaning of statistics aggregated across countries, for example EU totals. Some more basic problems of comparability exist because of an incomplete compliance with the SBS Regulation and its implementing Regulations or with related legislation on which SBS data relies, for example classifications and statistical units. A number of examples are provided below.

2.5.1.1. Thresholds and statistical units

Until recently many Member States applied thresholds excluding part of the population from the SBS data that they compiled and thus reducing the comparability between countries, as well as between sectors. Tables showing the extent of this for the annual enterprise series of data and for the regional series are provided in annex 5.

Many Member States have taken steps to remove these thresholds during the transition period from 1995 to 1998 (reference years, inclusive). Of the remaining thresholds for the annual enterprise series the most significant are:

-- Greece still applies a threshold of 10 persons employed in industry and construction;

-- Ireland still applies a threshold of 3 persons employed in industry and 20 persons employed in construction.

The question of the comparability of statistical units is more complicated. Luxembourg is the only Member State recorded as using a unit other than the enterprise for the main annual enterprise series. This gives an impression, unfortunately a false one, of comparability. A study by Eurostat and the Member States on the state of implementation of Council Regulation 696/93 concerning statistical units concluded that the meaning of the term "enterprise" varies widely. By extension it can be concluded that the meaning of the SBS data compiled according to this unit therefore also varies widely.

The group studying the implementation of Council Regulation 696/93 agreed that there was an urgent need to improve comparability. It has established some rules related to determining the limits of an enterprise and proposes to continue this work to develop further rules. It also proposes to investigate the conditions under which the KAU differs from the enterprise and to investigate further the possibility of agreement on a single statistical unit (either the KAU or the enterprise) for SBS and also for short-term business statistics.

2.5.1.2. Definitions

Many Member States have provided data for some variables according to non-standard definitions, thus reducing comparability between countries. During the transition period this can be regarded as an attempt by Member States to provide at least some data to users, even if not completely harmonised - the alternative might well have been not to provide the data at all. It is believed that all of these problems with definitions had been solved by the end of the transition period. It is however possible that other problems remain of which Eurostat is not aware. For information on the main problems identified during the transition period see the list in the annex 6.

2.5.2. Quality of SBS data: Coherence

When they originate from a single source, statistics are coherent in that elementary concepts can be combined reliably in more complex ways. When they come from different sources statistics are coherent in so far as they are based on common definitions, classifications and methodological standards. Eurostat has recently started a number of studies to evaluate the coherence of SBS data with other data sets. One compares SBS data with annualised short-term statistics and another looks at employment measures in SBS and various other sources. Some early results are available from the comparison with annualised short-term statistics. This looked at annual growth rates between 1995 and 1999. It concluded that the comparisons were particularly weak in NACE Divisions 30 (manufacture of office machinery and equipment) and 37 (recycling). Further work is planned to refine the methodology used and to investigate further possible sources of the differences, notably the use of different statistical units, data sources and data processing.

2.6. Future work on quality

Eurostat will establish a programme setting out priorities for measuring and improving the quality of structural business statistics. The quality programme will be a multi-annual rolling programme and will be discussed and approved at annual meeting with Member States. This programme is intended to include the following elements:

To measure the quality of the statistics by using a set of quality indicators and in order to identify areas which need quality actions;

To give special attention to improving the coherency of data when data from different surveys or sources are combined;

To evaluate the effect on SBS of the quality of business registers.

PART III

3. Costs and statistical burden

3.1. Impact of the adaptation process

At the end of 2000 Eurostat prepared its first proposals to amend the SBS Regulation using the Comitology procedure. The aims of this work were to try to reduce or at least contain the statistical burden, offering room for new investigations or developments of the SBS Regulation in the future. These were discussed with data users and the national statistical authorities.

After discussions with all parties concerned the following adaptations were agreed:

-- addition of two variables (wages and salaries and social security cost) to the list of variables in Section 4 paragraph 4 of annex 1 of the SBS Regulation;

-- addition of one variable (social security cost) to the list of variables in Section 4 paragraph 3 of annex 3 of the SBS Regulation;

-- modification of the level of activity detail for which data are to be transmitted for several variables (purchases of energy products, R&D expenditure and employment) in annexes 2 and 4;

-- modification of the variable "Turnover from the principal activity at 4-digit level" to be calculated at the 3-digit level instead;

-- replacement of two variables concerning the part of turnover from trading and intermediary activities by one variable covering both of these activities in Section 4 paragraph 3 of annex 3;

-- deletion of one variable (value added at basic prices which was already an optional variable) from all annexes;

-- deletion of one variable (number of apprentices) from Section 4 paragraph 3 of annex 2 and Section 4 paragraph 4 of annex 4 as well as a regrouping of eleven variables related to the purchase of different types of energy products into six variables in Section 4 paragraph 4 of annexes 2 and 4;

-- deletion of the series by public and private ownership foreseen in Section 7 paragraph 3 of annexes 2 and 4.

The changes to the SBS Regulation listed in the above paragraph were also made in the Commission implementing Regulations concerning definitions, data series and the transmission format. In addition the Commission Regulation concerning the data series was modified in order to reduce the number of size-classes used in the size class series.

The changes will be introduced for the data for the 2002 reference year.

In May 2002, the draft Commission Regulation was unanimously agreed by the SPC. On 6 September 2002 the Commission adopted this Regulation [25] which entered into force on 26 September 2002.

[25] Commission Regulation (EC) No 1614/2002 of 6 September 2002 adjusting Council Regulation (EC, Euratom) No 58/97 to economic and technical developments and amending Commission Regulations (EC) No 2700/98, (EC)No 2701/98 and (EC) No 2702/98.

Additional modifications were proposed by the Commission and by Member States, but the necessary consensus could not be found.

3.2. Some ways to limit the statistical burden

Various measures can be taken to contain response burden. For example:

i) by developing survey strategies to reduce the number of observed units, either by excluding parts of the population from the surveys or by replacing exhaustive surveys with samples ;

ii) by improving the organisation of surveys to reduce surveying units twice ;

iii) by implementing rotation in sample selection [26] ;

[26] This may not reduce burden but may ensure that it is more evenly spread across the business population.

iv) by removing redundant questions surveyed on multiple questionnaires ;

v) by using simplified questionnaires for smaller enterprises ;

vi) by making a more intensive or systematic use of administrative data ;

vii) by simplifying data entry (using electronic forms rather than pen and paper) ;

viii) by simplifying data transmission (providing post paid envelopes, using fax servers or enabling electronic data transmission) ;

ix) by aligning with other administrative declarations (accounting standards or software).

It is intended that the following overview of actions by Member States should refer strictly to the 1999-2002 reference period. In fact it is hard to apply a precise cut-off date as in some cases the preparation of actions took more than one year. In other cases a very active preparation has begun for new projects to be implemented relative to the 2003 reference year. Hence this overview must be understood to refer to "recent" years.

As already reported in the first report to the Council and European Parliament (2000), of all the implementation methods used or planned in the Member States, the use of administrative data, without any loss of information, is the one whose impact in terms of reducing response burden is the greatest.

3.2.1. Different ways of use of administrative data may be distinguished.

3.2.1.1. Using administrative data for a whole size stratum: a strong impact

In general, more and more statistical authorities use only administrative data for covering enterprises with employment levels below a certain threshold (20 or 50 persons employed for example).

Before 1999, only four countries (Denmark, France, Finland and Sweden) used administrative data to compile SBS data for a significant part of the domain covered, in other words for enterprises below a particular size threshold or in certain activities. Since 1999 four other countries (Greece, Spain, Luxembourg and the Netherlands) have used such an approach or are planning it for the next round of data collection. At the present time eight of the sixteen countries considered here rely entirely on statistical surveys and estimation methods for most of the requirements of the SBS.

3.2.1.2. Using both administrative and statistical data for the same units in a co-ordinated way

This approach normally involves developing survey strategies that only keep in the statistical questionnaires the variables that cannot be obtained from administrative sources.

This approach can lead to improvements in the harmonisation of administrative and statistical definitions.

This approach can also reinforce co-operation between Statistical and Administrative authorities; this co-operation may be imposed by a legal basis: for example, changes that are brought to the administrative data system have to be discussed with the statisticians before being implemented.

This approach can be greatly facilitated by the existence of a unique register number for administrative and/or statistical registers.

3.2.1.3. Using both administrative and statistical data in an integrated (and sophisticated) way

This approach uses ratio estimation techniques to gross the survey sample results based on auxiliary variables available from administrative sources; this approach has a strong impact. An alternative is to build a fully integrated statistical system where data from both administrative and statistical sources co-exist. This includes checking the consistency between data from different sources, and implementing estimation and imputation techniques.

Another possibility is to use an alternating strategy for the small units of certain sectors: the statistical survey is not conducted every year, but only every two years, for example, and the other year the administrative data are used for the sample which was surveyed the previous year. In this way surveys may not be conducted for all sectors at the same time (with half of the sectors being surveyed each year) and this allows a more regular work flow for the statistical office. This approach has a strong impact on the availability of preliminary data.

3.2.1.4. Using administrative data may involve some difficulties

A systematic alignment of administrative and statistical requirements should not be done at too great a cost for the quality of the statistics (it may be useful to keep in both sources some double counted variables such as employment). Equally it may not be possible to align in a strict way definitions in both sources without losing sight of the different purposes of the administrative and statistical information.

3.2.1.5. Checking permanently the relevance of questionnaires and surveys

The implementation of the SBS regulation in some Member States has been a good opportunity to revise significantly existing questionnaires (deletion of variables previously requested for national purposes but not required by the SBS Regulation, tailoring the form to the activity concerned; harmonisation of data collection between different surveys and possible deletion of some surveys or part of them, etc).

Some countries have committed themselves to regular and systematic checking of the relevance of questionnaires and surveys (official rolling programme).

3.2.1.6. Optimisation by sampling techniques

Alongside the actions undertaken for broader use of administrative sources, several Member States have significantly reduced the number of enterprises directly surveyed through better drawing of samples or by using sampling where previously exhaustive surveys had been carried out. These actions have often had a great impact in terms of reducing the response burden even if this only affects small enterprises.

This can be done by using sampling techniques with lower chances of selection for smaller enterprises. It can also be done by using co-ordinated sampling. This co-ordination may come out when samples for (two or more) different surveys are drawn or when samples are drawn for different years. The co-ordination involves ensuring that the burden of replying to surveys is more evenly spread across the business community, particularly between smaller enterprises. This can be applied in a way that leads to the full exclusion of all units in the previous sample (negative co-ordination). In some cases strict rules are applied for small enterprises for which a certain period of time must elapse before an enterprise can be included again in a survey.

To some extent the "rough" indicator (see chapter 3.3) can reflect in a quantitative manner the impact of these techniques.

3.2.1.7. Other methods to help enterprises to bear the statistical burden

Improving electronic data interchange (EDI): first attempts have been made or are planned with electronic questionnaires (incorporating control/verification procedures) or the use of EDI for electronic transmission of data between the national statistical authorities and enterprises. It is still difficult to judge the impact that these efforts will have on reducing response burden.

New ways of collecting the data have been developed since 1998, for example providing respondents with Excel-files instead of paper questionnaires. There are also projects to collect data over the Internet as from the reference year 2001 in some countries. In each case, the impact on the response burden is medium.

Helping the respondents by providing instructions how the questionnaires are to be filled (including information on the links between questions in the forms and the basic accounting plans). The impact on the response burden is judged weak.

Sending to selected enterprises a leaflet explaining the need for the information and the importance of their contribution along with details of how the national statistical authority tries to keep their burden to a minimum. The impact on the response burden is judged weak.

3.3. A summary indicator of the evolution of the statistical burden

The aim here is to achieve a quantitative assessment of the development of enterprises' response burden at the European level due to the SBS regulation on a quantitative basis. The difficulty of providing a relevant quantitative assessment has to be underlined and some important limits stressed. However an attempt to build such an indicator has been made.

3.3.1. Method and limits of a quantitative indicator

This indicator measures developments between 1990 and 2003 of the number of enterprises surveyed by statistical questionnaires. It has been calculated from information for the majority of Member States (plus Norway). Between 10 and 12 countries provided information depending on the reference year. In most cases breakdowns by size classes were provided so that indicators could have been updated for each size-class.

The calculation principle is to establish comparisons on a "constant field". In other words it is calculated for a stable sectoral and size coverage in the periods studied. As such the indicator does not take into account the rise in the number of questionnaires sent resulting from an increased coverage of the economy. A gross indicator calculated independently of the coverage of the economy over the period analysed would, by definition, have indicated an increase in the number of enterprises surveyed, because one of the major strengths of the SBS Regulation has been precisely to expand coverage to the full range of economic activities.

However, even limiting the indicator to a constant coverage - defined individually for each Member State -the indicator provided does not take account of the significant increase through the implementation of the SBS Regulation in the quantity of information provided to users nor its quality including data freshness. Equally it does not take account of the improvements that have been made in the drafting of questionnaires (headings, explanatory notes, links to accounting standards and so on) nor even the use made of administrative data for some variables. In this sense it under-reports the reduction of the response burden resulting from initiatives made by Member States as it is not compiled for a fixed quantity of information supplied.

This indicator should therefore be considered rather as an indicator of the impact of measures taken by Member States to reduce response burden limited only to the number of enterprises questioned. The other limitations of this indicator are the following :

i) as it is calculated as a global indicator from the information provided by several Member States it does not show the diversity of national situations. In some cases the impact of national measures is significantly greater that that shown by this global indicator.

ii) the extent to which Member States have access to administrative data strongly influences the possible impact of the efforts made by each one.

iii) as this is a very rough indicator it cannot describe the very complicated survey strategies which are implemented by some Member States, for example when several statistical surveys are combined with different administrative sources. In some cases only a few variables have been taken into account and not necessarily all of those in Annex 1 of the SBS Regulation.

iv) finally, it would be meaningless and possibly misleading to try to compare this indicator with the situation in any individual Member State.

3.3.2. The main results

The following table gives the results. Some changes happened for the early periods compared to the table presented in the first report to the Council and the European Parliament because some countries updated figures for either the 1995 or 2000 reference years and there were also contributions from countries that were not available for the first report.

The results have been established for the main annual enterprise series (series 1A). The indicator is expressed with 1990 = 100.

>TABLE POSITION>

The two first lines of the table show a regular and constant effort to maintain and even reduce the rate for questionnaires sent to small enterprises and in some extent to medium enterprises.

Despite the technical or even conceptual difficulties which put some limits to the interpretation of this indicator, it can be considered that a significant effort was made between 1995 and 2000 to control the statistical burden for small enterprises. During that period, to a certain extent, the aim may have been to make room for extensions towards new sectors. These efforts seem to have since slowed down, possibly as they reach certain limits.

3.3.3. National efforts to measure compliance costs

At present, for national purposes, a few Member States attempt to assess the statistical burden in a quantitative manner. For example, every year Statistics Denmark publishes the burden on enterprises. The time taken to provide each compulsory variable is evaluated. On a yearly basis Statistics Netherlands tracks the burden on enterprises in terms of time and financial cost. The United Kingdom produces an annual publication quantifying in financial terms the burden of all of its business surveys.

PART IV

4. Development of Structural Business Statistics

4.1. Review of the pilot studies and similar work on missing definitions

One of the main reasons for developing a new legal basis for structural business statistics was the lack of flexibility in the existing legal basis for industrial structural statistics. Hence, when the SBS Regulation was drafted, a broader flexibility was written into the legislation than the Directives that it replaced in order to make it possible for the legal basis to adapt to new requirements. One of the ways in which this was done was to develop the idea of pilot studies. The choice of subjects for pilot studies was based initially on the needs perceived at that time that were not met by the compulsory provisions of the SBS Regulation and on the perception of likely needs in the medium term. Developments in the political and economic framework have led to additional demands for the collection of data on issues that could not be and were not foreseen when the Commission's proposal was originally drafted. As a result development work has stopped on some of the pilot studies and those that continue have been integrated into a broader development programme (see chapter 4.2).

The pilot studies foreseen in the SBS Regulation can be grouped into four types: i) those where development work was undertaken and has led to proposals to start regular data collection (either voluntary or with a legal basis) ii) those where development work was started but has not yet led to a regular data collection iii) those where development work was started but has been discontinued and iv) those where no significant development work was undertaken. Each of the pilot studies is reviewed briefly below.

4.1.1. Development work that has lead to proposals for regular data collection

In accordance with the provisions of Section 10 of Annex 1 of the SBS Regulation, pilot studies have been organised on the possibility to add the financial activities in NACE Group 65.2 and Division 67 to the coverage of Annex 1. Following this, by way of the amendment to the SBS Regulation adopted on 5 November 2002, these activities have been added to the list of activities covered by Annex 1 of the SBS Regulation. The first reference year for the production of the data, as well as the exact specification of the data to be transmitted and the transmission period, will be laid down using the Comitology procedures. Regular voluntary data collections have been undertaken since 2001: the first concerned reference year 1999.

For credit institutions (NACE Class 65.12 and part of NACE Class 65.22) regular voluntary data collections have been undertaken for a list of characteristics specific to these activities since the 1997 reference year. Following this, by way of the amendment to the SBS Regulation adopted on 5 November 2002, an annex (number 6) specific to these activities has been added. The first reference yea